Financial Emergency
Koutalya’s Arthasastra vis-à-vis Indian Constitution
Vanikavi Dr.Manmohan Acharya
Koutalya is the epitome of Ancient Indian Political System and his Arthasastra is an encyclopedia of polity and governance. Though the state and its government became the primary subject, everything coming under government including the life and activities of citizens is discussed in Arthasastra. Koutalya gives the concept and idea of a sovereign country. His Mandala theory and deposition of inimical powers is a contribution to the problem of war, peace and external relations. In internal administration, in gathering intelligence , in rooting out of internal enemies, spies of enemies, corrupt officers etc Koutalya’s genius leaves no stones unturned. Simultaneously exploiting natural resources on land or sea, production, trade and commerce, inland and overseas, occupation, revenue and taxation. Not only Koutilya deals with these subjects so as to give a total picture of a welfare state under a benevolent monarchy but also expounds on a republican state.
Historical background of Indian Constitution
Govt of India Act,1858 , Indian councils Act,1861, ,
Indian councils Act,1892,Indiancouncils Act,1909,
Govt of India Act, 1919,Govt of India Act,1935,
Indian independence Act,1947 .
Commencement of Indian Constitution, 26th Jan, 1950.
“The very fact of the constitution of Indian Republic is the product not of the political revolution but of the research and deliberations of a body of eminent representatives of the Country.”
Indian Constitution in regards to Financial crisis of the country
Art.360 of Constitution reads as follows –
“(1) If the president is satisfied that the situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect.
(2)A Proclamation issued under clause (ii ) –
a. may be revoked or varied by a subsequent Proclamation ;
b. shall be laid before each House of Parliament ;
c. shall cease to operate at the expiration of two months, unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament :
Provided that if any such Proclamation is issued at a time when the House of the People has been dissolved or the dissolution of the House of the People takes place during the period of two months referred to in sub-clause©, and if a resolution approving the Proclamation has been passed by the Council of State, but no Resolution with respect to such Proclamation has been passed by the House of the People before the expiration of that period, the proclamation shall cease to operate at the expiration of thirty days from the date on which the House of the People first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the Proclamation has been also passed by the House of the People.
(3)During the period any such Proclamation as is mentioned in clause (i) is in operation, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial property as may be specified in the directions, and to the giving of such other directions as the president may deem necessary and adequate for the purpose.
(4) Notwithstanding anything in this Constitution –
(a) any such direction may include:
(i) A provision requiring the reduction of salaries and allowances of or any class of persons serving in connection with the affairs of a State ;
(ii) A provision requiring all Money Bills or other Bills to Which the provisions of Article 207 apply to be reserved for the consideration of the President after they are passed by the Legislature of the State ;
(b) It shall be competent for the President during the period any Proclamation issued under this article is in operation to issue directions for the reductions of salaries and allowances of all or any class of persons serving in connection with the affairs of the Union including the Judges of the Supreme Court and the High Courts”.
i. Constitution considers the reduction of salary and allowance of servants as a vital solution of financial crisis.
ii. President shall have absolute power in passing the money bills
iii. Collection of the taxes and levies as per schedule VI shall be continuing.
iv. But the constitution does not venture any other measures steps for the development of financial status of the country.
Koutalya’s Arthasastra about financial crisis:
(Adhikaran.5.Ch.2 .KOSHABHISAMHARANAM)
1.King shall have absolute power at the time of financial crisis of the state.(Artha.5/2/1)
2.He can take some other steps of restoration of economic stability.(Artha.5/2/1)
3.He can collect 1/3rd or 1/4th of total production of crops from the rich cultivators by request not by force.(Artha.5/2/2)
4.King can not collect the above tax from the persons those take care of forests, mines, roads, bridges and empty palaces and from the citizens of border areas.(Artha.5/2.3)
5.King shall provide aids to the poor farmers for agricultural purpose and food cloth ,shelter etc. His govt shall purchase the surplus crops from them. (Artha.5/2.4)
6.King should not bind the vedic teachers to pay the tax out of crops produced from the forests even at the time of financial emergency. Rather his govt shall purchase the surplus crops from them by providing money. (Artha.5/2.5)
7.No agricultural land shall be left uncultivated. Even if the teaching community is incapable of cultivating their own land, the employees of the King under the supervision of Samaharta shall take care of the cultivation of that land. (Artha.5/2.6)
8. The farmer will be subject to fine the double of the expenditure, if the crops are destroyed due to his negligence or fault. (Artha. 5/2.6)
9. The Government will feed the beggars and daily labourers out of the income from the land cultivated by itself. (Artha,5/2.6)
10. A farmer is subject to reduction of taxes if his crops are stolen from the field. But he will be bound to pay eight times of his original tax if he himself steals the same to avail the benefit. (Artha, 5/2.7)
11. If a thief caught red handed stealing the crops of his own village mate he will be penalized with fifty times of the original cost of the crops. (5/2.7-8)
12. The government shall collect 1/4th of food grains, 1/6th of forest crops,1/6th of the production of cotton, wax, skins, leathers, dress materials, silk, medicine, scent, flowers, fruits, vegetables, wood, bamboos and dry meats and 1/2nd of teeth and skins of animals. The above materials can not be sold without the prior permission of thegovernment.(Artha5/2.9)
13. King can collect sales tax at the time of financial emergency. King can collect 2% of the cost of the gold, silver, diamond , jewel, pearls, horses and elephants if sold. The king can impose sales taxes on all shorts of consumer goods.( Artha, 5/2.10)
14. The king can impose industrial taxes on glass industry, jewelry, shipping industry etc. (Artha, 5/2.10)
15. The king can collect entertainment tax from the dancers and prostitutes not from their customers directly. (Artha , 5/2.10)
16. Any commercial firms involved in duplicating the original goods and productions shall be subject to heavy fine. (5/2.10)
17. The king can collect 1/6th of the cost of the domestic animals like goats, buffaloes, pigs, hens etc.( 5/2.10)
18. The beautiful ladies permitted by the administration can collect donations from wealthy persons.( Artha.5/2.10)
19. These types of taxes can be imposed on the citizens once and only at the time of financial emergency. ((5/2.11)
20. The collector (samahartta ) can follow various ways of collecting donations to feed the treasury. He can appoint the diplomats and spies to praise the persons paying heavy donations. The spies collect information about the paying capacity of the people and corrupt money lying with the people.( Artha.5/2.12)
21. The king can arrange felicitation and awarding the donators for the enhancement of the royal treasury.( Artha.5/2.13)
22. The employees of the king can follow some unethical and cunning policies to collect donations from misers. (5/2.13-23)
23. As a gardener plucks only the ripe fruits from the garden, a king should extract wealth from the capitalists and corrupt citizens. Even king is excused for his unethical way of collection, as it is barely necessary for the economic balance of the country and enriching the royal treasury.
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