Part 4 11724
The Arthashastra explores issues of social welfare, advising the king
that in times and in areas devastated by famine, epidemic etc., or by war,
he should initiate public projects and exempt taxes on those affected.
Kautilya said that good governance and financial stability go hand in hand.
According to him, there is stability if rulers (managers) are responsive,
responsible, accountable, removable, and recallable. It has been observed-
“In the happiness of his subjects lies the king’s happiness, in their
welfare his welfare. He shall not consider as good only that which pleases
him but treat as beneficial to him whatever pleases his subjects”.
{1.19.34}.
The Arthashastra promotes a mixed economy of private and state
enterprises. The private enterprises were taxed. Mines were state owned
but leased to private parties for operations. The Arthashastra states that
protecting the consumer must be on the priority list of the official. It is
interesting to note that the state was held responsible for any failure to
protect the public. If anyone’s property was unjustly appropriated and not
restored, he was paid its value {3. 16.25-27}.
Judges could modify the rate of interest if the king was responsible
for the loss by not providing adequate protection {3 .11.3}. With all
intelligent ideas, there are demerits also. Kautilya has been criticized
for being over obsessed with crafty tricks, stress on caste system and
being gender insensitive. The Arthashastra served a working manual for a
king rather than a narrative history book. It only gives a glimpse of the
society at that time.
g) BUDDHIST SCRIPTURES AND TAXATION
The core philosophy of Buddhism is based around inter-dependence,
compassion, and right livelihood. It provides guidance for restructuring
both our individual lives and the economy to create a better world. Goal of
the Buddhist financial principle is “the maximum of well-being with the
minimum of consumption”. The Buddhist literature though do not provide
elaborate detail of taxation, but it mentions tax on agriculture,
merchandise, vendors and tolls on the gates and levies on the birth of an
heir. Buddhist scriptures acknowledge existence of taxation as a welfare
tool. Some scattered remarks on optimal rate of taxation are found. Taxes
were desired to be low and never higher than one sixth of gross production.
Unlike Hindu texts, Buddhist do not agree on the divine status of the king.
Accordingly, King’s right to levy taxes is limited to his efficient
discharge of duties. If the rulers tend to cross the limit of taxation, it
was described as, theft from the subjects. Buddha himself advised
‘Prasenajeet’, the king of ‘Koshala’ in the following words: –
“Do not harass human beings;. . . be not affected by arrogance. . . .
do not take land revenue in excess of the share allowed by law”. .
.(Buddhcarita XX:19-21)
“Tell me about your ninth dream,” the Buddha said to king Pasenadi,
(Prasenajit)-
“I saw a deep pool with sloping banks overgrown with lotuses. From all
directions, a wide variety of animals came to drink. Strangely, the deep
water in the middle was terribly muddy. Yet the water at the edges, where
all the thirsty creatures descended into pool, was unaccountably clear and
sparking. This was my ninth dream. What does it mean?”
“This dream will come to pass in the future when rulers grow
increasingly corrupt. Ruling according to their own whim and pleasure, they
will not make judgments according to what is right. Being greedy, they will
grow fat on bribes. Not showing mercy or compassion to their subjects, they
will be fierce and cruel. These rulers will amass wealth by crushing their
subjects like stalks of sugarcane in a mill and by taxing them to the last
penny”.
“Unable to pay the oppressive taxes, the citizen will abandon their
villages, towns and cities and will flee like refugees to the borders. The
heart of the country will be a wilderness, while the remote areas along the
borders will teem with people. The country will be just like the pool,
muddy in the middle and clear at the edges”.
In the “Acts of Buddha” 2:44, the philosopher poet-Aśvaghoṣa praises
Buddha’s father, King ‘Sudhodhana’- “44. He desired not to take his tribute
of one-sixth without acting as the guardian of his people; he had no wish
to covet another’s property; he desired not to mention the wrong-doing of
his enemies; nor did he wish to fan wrath in his heart”. Asvaghosa has
objected to excessive taxes in the Mahayana Buddhist scripture “Requested
by Surata”. The Boddhisattva Surata upbraids the corrupt king of ‘Sravasti’:
“Your Majesty, you levy harsh taxes and punish the innocent for no
reason, Infatuated with your sovereignty, You never heed the future effects
of your karmas(deeds)”.
Famous Buddhist philosopher, Nagarjuna[42] (150-250 CE), objects to
high taxes in his precious Garland 4:251-253, as follows- 251. Provide
extensive care for the persecuted, the victims of crop failure, the
stricken, those suffering contagion, and for beings in conquered areas.
252. Provide stricken farmers with seeds and sustenance, eliminate high
taxes levied by the previous monarch, Reduce the tax rate on harvests, 253.
Protect poor from pain of wanting your wealth. Set up new tolls & reduce
those that are heavy, also free traders from other areas with afflictions
that come from waiting at your door. The redistributive function of
taxation is also discussed by Nagarjuna, not only from rich to poor but
from richer to poorer region.
Further, the redistribution of wealth to the needy is one of the four
pillars of a king’s popularity. The other three being kind speech,
sagacious conduct and feeling for the common good. The principle of need
was also acknowledged by Asoka who proclaimed in his Fifth Rock Edict and
Seventh Pillar and Edict that disadvantaged persons such as old people,
orphans and prisoners must be looked after. A general theme of Buddhist
writing on public revenue and expenditure is that both should be governed
by rational principles. This is the lesson that Kuttadanta Sutta seeks to
impart the King Mahavijita. Faced with the financial crises, the king plans
a traditional sacrifice or yagna to please the gods. His priest suggests
that instead of wasting resources, more rational means would be to provide
the agriculturists and herdsmen with food and seed corn, traders with
capital and government servants with wages. This would help increase
production, reduce corruption, increase king’s revenue, and keep the people
happy. Duties of king have been beautifully explained in a practical way,
through many Jataka tales.
h) JAIN TEXTS AND TAXATION
Talking about the aspects of Jain literature and traces of financial
administration in the Jain texts, Jagdish Chandra Jain in his book[44],
contends that revenue and taxation were the chief support of the state.
Revenue in ancient India was derived partly from taxation and partly from
sources other than taxation. Jagdish Chandra Jain in his above book states
that the ‘Vyavahara Bhashya’ mentions one-sixth of the produce as legal
tax, but it seems that it varied according to the amount of the produce,
the cost of cultivation, the condition of the market, and the nature of the
soil. There were various sources of income to the state. Eighteen types of
taxes are mentioned in the Jain texts: taxes from cows, buffaloes, camels,
goats, grass, straw, chaff, wood, coal, plough, threshold, pasture-ground,
bullocks, earthen pots, hides and skins, food and any other tax imposed by
will. Taxation always included certain exemptions also. Exemptions from
taxation were also granted to individuals under certain circumstances to
some classes in the enjoyment of privileges. Apastamba and Vashishta concur
in granting immunity from taxation to ‘shrotriyas’ women, minors, students,
‘tapasas’ or ascetics and blind, deaf, or dumb persons, artisans’ beggars,
etc. like Buddhism, Jainism also uses stories to explain various
propositions to common folk.
III. CONCLUDING REMARKS Thus, ancient Indian texts contain several
valuable guiding principles of governance and tax administration. Detailed
study of these ancient texts will enlighten us about the astuteness of our
ancestors w.r.t financial planning, good governance, etc. that will bring
back into focus the excellent intellectual wealth of our ancient past. Such
a study will enable us to adopt appropriate measures for development of our
nation.
END Part 1to 4 KR IRS 11724
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