Indian Economics and Business Model

Indian Knowledge System IKS-1 UNIT I

History of Indian Economy Thoughts, New Indian Economic Model & Sectorial Contribution,
Past vs Present History of Indian Economy, Economic Thoughts: Context from Dharmashastras,
Shukraniti, Mahabharata, and Arthashastra, Kautilya’s Economic thoughts in specific ,India
and Global GDP: Ancient India, Beyond Capitalism and Communalism, Dharmic, Caste as
Social Capital, Black Money, and Tax Heaven. Agriculture: Ancient India, Manufacturing:
Ancient India, Education in India, Wealth in India, Governance, and Business in India, Where
India Stands Globally

Compiled By:-
Raghunandan R. Shrivas
Assistant Professor
(G H Raisoni University, Amravati)
History of Indian Economy Thoughts
Indian economic thought is relatively little known either in India or elsewhere. The study of
ancient Indian economic ideas provides a deeper 1insight into India's culture, tradition, and inherent
national characteristics. The major sources of information about the economic ideas of Indian writers
are Vedas, Arthasastra, the Ramayana and Mahabharata, Manusmriti, Sukraniti, and several other
ancient Indian texts. Many scholars, particularly during the first half of the 20th century, attempted to
make an objective and unbiased evaluation of ancient Indian economic ideas, explicitly or implicitly,
contained in ancient Indian writings. Indian economic thought has certain special features which
necessitates a separate study of Indian economic thought. The history of Indian economic thought
provides rich insights into both economic issues and the workings of the Indian thinkers. A study of
the history of Indian economic thought provides the first overview of economic thought in the sub-
continent. The sources of information available for the study of ancient Indian economic thought are
Vedas, the Upanishads, the Epics - Ramayana and Mahabharata, Smritis and Niti Shastras particularly
those of Manu and Shukra. Among these, the two most well-known ancient Indian writings are
Arthasastra and Manusmriti. Kautilya was the important thinker, whose ‘Arthasastra’ has been
considered the most reliable work on ancient Indian economic thought. It should be mentioned that
ancient Indian thinkers had no clear conception of economics and their ideas were mixed with politics,
ethics and economics.

Dharma
The concept of dharma is central to Indian economic thought. One of the purusharthas, dharma
means much more than what is understood in the narrow sense of religion. It meant righteousness,
truthfulness and charity, which are more associated with the satisfaction of the soul. The modern
parallel to this concept can be found in behavioural economics, which has proven that man’s
objectives can be influenced by something more than mere monetary incentives.
This was the concept behind the nudge economics used by the government of India to
encourage upper middle class and middle class citizens to give up LPG subsidy by appealing to their
conscience. Dharma or righteousness as a motive of action was visible in suggestions on kingship by
Rama to Bharat, Krishna to Arjun on war as duty and interactions between Nachiketa and his father on
concept of charity and philanthropy.
Concepts like charity also comes under the ambit of dharma. The Rig Veda describes charity as
a voluntary act, rather than a fiat as in Abrahamic religions. Bhagwat Gita even describes three kinds
of charity — the one without expectations (satwik), another given grudgingly with expectations
(rajas), and the one provided with wrong causes and wrong times (tamas).
Charity in modern economic terms is treated as a positive externality, especially in times of
economic slowdowns to boost consumption. On similar lines, the Indian texts too proved to be
experiential in recognising the goodwill and virtuous cycle generated by charity.

Wealth in ancient Indian thought

Defying popular perception, wealth and artistic pleasure (artha and kama) were considered as
important as dharma. One of the quotes said by Arjuna to Yudhishthira in the Mahabharata, “Wealth
brings about accession of wealth, just like domesticated elephants are used to capture wild
elements…”, reflects the deep understanding and due importance given to wealth creation by early
Indian thinkers.
The emphasis is laid not on wealth creation, but on wealth creation through ethical means, as a reading
of Shri Sukta would suggest. The importance given to material aspects cannot be overemphasised
when we note that Book 2 and 3 of Tamil text Thirukkural are titled Porum (wealth) and Inbam
(pleasure). Importance to artistic pleasure is also given in the Natya Shastras and Vedas.
One of the most important concepts of the Indian economic thought and literature, the varna system, is
unfortunately misunderstood as a social division rather than an economic one. Texts like the Vajra
Suchi Upanishad explains the varna system as ‘guna-karma’, an attribute-based classification. Avni
Samhaar, a play by 8th Century Scholar Bhatta Narayan, quotes Karna, “Whether a charioteer, or a
charioteer’s son, or whoever else I am, birth in a family depends on fate. Gallantry or deeds depend on
me.”
In the Mahabharata, a discussion between Bhrigu and Bharadwaj points to the belief among sages that
all four Varna as similar as humans, for all of them bleed, sweat, toil and suffer in a similar manner.
Ambedkar in his collected works pointed out that varnas were allotted on occasion of Upanayana,
which used to happen after 12 years of education. These examples and anecdotes show that the idea of
the varna system was not as evil as it later evolved to become.

Statecraft and economy

On the concept of state and economic policies, the Aitereya Brahmana described various forms
of state like rajyam (state), maharajyam (greater state) and ganarajyam (sovereign state), among
several others. Kingdoms were divided into janapadas and mahajanapadas, where kings were the
representatives of the people and kingship was not necessarily hereditary. Narada questions kings
whether they have built wells, provided loans at concessional rates, taken care of the destitute and
protected the citizens and industries from external threats.
These concerns compare well with modern policy concerns of governments. On the concept of
revenue deficit, Narada asked Yudhishthira whether or not his administrative expenses were 1/4th,
1/3rd, or at worst 1/2nd of his income. Kautilya in Arthashastra advised the king that salaries to
bureaucracy must not exceed 25% of his own income. Thus, there was great concern for fiscal
prudence in administration in those times.
On monetary aspects, Panini discussed weekly, monthly and annual compounding in an era as early as
6th century BCE, while Kautilya discussed the relationship between the riskiness of lending and
interest rate to be charged. On the contrary, Greeks considered interest income as barren, and
compared the idea of charging interest to committing a murder. Value for capital and wealth was
conceptualised by Indian economic thought before the rest of the world.

Public finance in India thought

We can also find an example of quantitative easing during Kautilya’s period where copper
coins were plated with silver to increase money flow in the time of a crisis at the minimum state cost.
Comparable to the modern idea of pay commissions, Kautilya had specified a wide range of salary,
ranging to be paid to bureaucrats with different skill sets. Factors of production have also been
discussed and highlighted in the Ramayana, where mentions of land surveyors, plotters and
mechanical operators can be found in abundance.
The Yajur Veda itself marks various professions ranging from basket makers to butchers. Concern for
labour issues has also been discussed extensively in the Ramayana and Mahabharata, where kings
were advised to never delay the payment of wages. References to labour unions have also been made
in these texts and they have been represented by terms like Nigam, Sangha and Nikaya. Perhaps labour
unions are not as western as they seem to be. The union leaders were called Shreshthas.
Land has been regarded as Vasudha or Vasundhara by ancient Indian economic thought. The
terms signify that land was viewed as wealth creator and not wealth in itself, even in a society that was
agriculture-based. This was because God was believed to be the owner of every natural resource, while
the king was merely a custodian (Purva Mimamsa, 400 BC). The respect for property rights and
sovereignty was well demonstrated when Rama rejected the idea of establishing his own kingdom in
Lanka and decided to return.
It is said that science without history is like a man without memory. The same stands true for
economic sciences as well. Consciously or unconsciously, ancient Indian economic thought and
attitudes have been reflected in post-independence administration and the economic planning of the
country. It is high time we acknowledge our ancient wisdom and take lessons from it to deal with these
turbulent times.

New Indian Economic Model & Sectorial Contribution

India's economic model has undergone significant transformations over the years, moving from a
primarily agrarian economy to a more diversified one with a focus on technology, services,
manufacturing, and innovation. Several key factors contribute to India's economic model and its
sectorial contributions within the knowledge system:
1. Service Sector Dominance: The service sector, particularly IT, business process outsourcing
(BPO), and software services, has been a significant contributor to India's economy. This
sector has been pivotal in leveraging India's skilled workforce and has contributed substantially
to GDP growth and employment.
2. Manufacturing and Industrial Growth: India's manufacturing sector has been evolving,
focusing on industries such as automobiles, pharmaceuticals, textiles, and electronics. The
government has initiated various schemes and policies to boost manufacturing through
initiatives like "Make in India" to encourage domestic production and attract foreign
investment.
3. Agricultural Sector: Despite the decreasing contribution to GDP, agriculture remains a crucial
sector in terms of employment and livelihoods for a significant portion of the population.
Efforts are being made to modernize this sector, introduce technological advancements, and
improve infrastructure to enhance productivity.
4. Innovation and Technology: India has a growing emphasis on innovation and technology, with
a burgeoning startup ecosystem, particularly in areas like fintech, biotech, renewable energy,
and artificial intelligence. Government initiatives like "Digital India" and "Startup India" aim
to promote innovation and entrepreneurship.
5. Knowledge-Based Industries: India's prowess in education and research contributes to the
knowledge economy. The country has several esteemed educational institutions and research
centers that drive advancements in science, technology, medicine, and other fields, contributing
to global knowledge systems.

History of Indian Economy Past Vs. Present

Ancient times till 1707 AD
The history of India begins with the dawn of Indus Valley civilization which flourished
between 3500 BC to 1800 BC. The Indus civilization's economy appears to have depended
significantly on trade, which was facilitated by advances in transport. Its citizens practiced agriculture,
domesticated animals, made sharp tools and weapons from copper, bronze and tin and traded in
terracotta pots, beads, gold and silver, coloured gem stones such as turquoise and lapis lazuli, metals,
flints, seashells and pearls. They used to ships to reach Mesopotamia where they sold gold, copper and
jewellery.
Around 600 BC, the Mahajanapadas minted punch-marked silver coins. The period was
marked by intensive trade activity and urban development. By 300 B.C., when Middle East was under
the Greek Seleucid and Ptolemaic empires the Maurya Empire (c. 321 -185 BC) united most of the
Indian subcontinent. The political unity and military security allowed for a common economic system
and enhanced trade and commerce, with increased agricultural productivity. The empire spent
considerable resources building roads and maintaining them throughout India. The improved
infrastructure combined with increased security, greater uniformity in measurements, and increasing
usage of coins as currency enhanced trade. For the next 1500 years, India produced its classical
civilizations which generated wealth in huge amount. Between 1st and 17th centuries AD, India is
estimated to have had the largest economy of the ancient and medieval world, controlling between one
third and one fourth of the world's wealth.

During the Mughal period (1526–1858 AD) India experienced unprecedeneted prosperity in
history. The gross domestic product of India in the 16th century was estimated at about 25.1% of the
world economy.
Given below are the figures produced by Professor Angus Maddison, Emeritus Professor at the
University of Groningen, Netherlands, and Honorary Fellow at Cambridge University, estimating
India's wealth relative to world GDP for the years 1000 AD, 1500 AD, 1600 AD, and 1700 AD. India's
share of world GDP was slightly more than a quarter in the year 1000 AD, and slightly less than a
quarter between 1500 AD and 1700 AD.
GDP in millions of 1990 International Dollars

Years 1000AD 1500 AD 1600 AD 1700 AD

India 33,750 60,500 74,250 90,750

China 26,550 61,800 96,000 82,800
West Europe 10,165 44,345 65,955 83,395
World Total 116,790 247,116 329,417 371,369

In the 18th century, Mughals were replaced by the Marathas in much of central India while the other
small regional kingdoms who were mostly late Mughal tributaries such as the Nawabs in the north and
the Nizams in the south. The British imperial empire began to grow in India in the middle of 18th
Century. The phase of decline of Indian industry set in British rule.

The British East India Company whose political power gradually expanded in India from 1757
onwards, used huge revenue generated by the provinces under its rule for purchasing Indian raw
materials, spices and goods. Thus the continuous inflow of bullion that used to come into India on
account of foreign trade stopped altogether. The Colonial government used land revenue for waging
wars in India and Europe leaving little for development of India. In short span of 80 years (1780-1860
AD) under Colonial rule, India changed from being an exporter of processed goods for which it
received payment in bullion, to being an exporter of raw materials and a buyer of manufactured goods.
More specifically, in the 1750s, mostly fine cotton and silk was exported from India to markets in
Europe, Asia, and Africa; by 1850s raw materials, which chiefly consisted of raw cotton, opium, and
indigo, accounted for most of India's exports.

The ruthless exploitation under British colonial rule completely devastated India‟s economy.
India‟s population was subject to frequent famines, had one of the world's lowest life expectancies,
suffered from pervasive malnutrition and was largely illiterate. As per British economist, Angus
Maddison India's share of the world income went from 27% in 1700 AD (compared to Europe's share
of 23%) to 3% in 1950.
India after Independence 1950-1979
After India got independence from colonial rule in 1947, the process of rebuilding the economy
started. India went for centralized planning . The Five Year Plans which successfully transformed
erstwhile USSR were made a tool for development. First five year plan for the development of Indian
economy came into implementation in 1952. Being largely an agrarian economy, investments were
made in creation of irrigation facilities, construction of dams and laying infrastructure. Due
importance was given to establishment of modern industries, modern scientific and technological
institutes, development of space and nuclear programmes. However, despite all efforts on economic
front, the country did not develop at rapid pace largely due to lack of capital formation, cold war
politics, defense expenditure, and rise in population and inadequate infrastructure. From 1951 to 1979,
the economy grew at an average rate of about 3.1 percent a year in constant prices, or at an annual rate
of 1.0 percent per capita. During this period, industry grew at an average rate of 4.5 percent a year,
compared with an annual average of 3.0 percent for agriculture.
1980-1990

The rate of growth improved in the 1980s. From FY 1980 to FY 1989, the economy grew at an annual
rate of 5.5 percent, or 3.3 percent on a per capita basis. Industry grew at an annual rate of 6.6 percent
and agriculture at a rate of 3.6 percent. A high rate of investment was a major factor in improved
economic growth. Investment went from about 19 percent of GDP in the early 1970s to nearly 25
percent in the early 1980s. Private savings had financed most of India's investment, but by the mid-
1980s further growth in private savings was difficult because they were already at quite a high level.
As a result, during the late 1980s India relied increasingly on borrowing from foreign sources. This
trend led to a balance of payments crisis in 1990; in order to receive new loans, the government had no
choice but to agree to further measures of economic liberalization. This commitment to economic
reform was reaffirmed by the government that came to power in June 1991.
Liberalisation and its effects (1991 Onwards) :

While commending his first budget in 1991 Dr Manmohan Singh had quoted Victor Hugo and said,
“No power on earth can stop an idea whose time has come. The emergence of India as a major
economic power in the world happens to be one such idea”. Since then economy has progressed
immensely with GDP progressing at the rate of 6-8% per annum. The GDP (nominal) has grown from
US$ 267.52 billion in 1992 to US$ 1.85 trillion in 2012. India is third largest economy of the world
and a preferred FDI destination. India‟s foreign trade reached US$ 785 billion in 2012. India‟s major
industries include information technology, telecommunications, textiles, chemicals, food processing,
steel, transportation equipment, engineering goods, cement, mining, petroleum, machinery, software
and pharmaceuticals. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea,
sugarcane, potatoes, cattle, sheep, goats, poultry and fish. In 2011–2012, India's top five trading
partners are China, United Arab Emirates, United States, Saudi Arabia and Switzerland. The
percentage share of various sectors in the economy in the year 2011-12 is given below. The high
contribution of services and manufacturing sector indicates the huge progress made by Indian
economy since its Independence when it was predominantly agrarian economy (59% in 1951).
 Sectors Percentage Share in GDP in
1950-51 2011-12
Primary Sector 59.0 16.1
Secondary Sector 13.0 24.9
Tertiary sector or Service Sector 28.0 59.0

India is a leading country in services sector so much so that she is referred to as „the back office of the
world‟. However, India has made significant progress in various spheres of science and technology
over the years and can now take pride in having a strong network of S&T institutions, trained
manpower and an innovative knowledge base. India has already become hub for manufacturing of
small cars and engineering goods. The Government had devised the National Manufacturing Policy
(NMP) in 2011 with an aim to enhance the share of manufacturing in India's GDP to 25 per cent and
add at least 100 million jobs by 2025. India is poised to become the second largest economy in
manufacturing by 2017, followed by Brazil as the third ranked country, according to consulting major
Deloitte. The manufacturing exports from India could increase to about US$ 300 billion by 2015,
according to a report titled 'Made in India-the Next Big Manufacturing Export Story', jointly prepared
by industry body CII and McKinsey. McKinsey analysis finds that rising demand in India, together
with the multinationals‟ desire to diversify their production to include low-cost plants in countries
other than China, could together help India‟s manufacturing sector to grow six fold by 2025, to $1
trillion, while creating up to 90 million domestic jobs.

India is one of the largest and fastest-growing markets for food and agricultural products in the world.
India is the world's third largest producer of food. Agriculture accounts for about 16.1% of India‟s
GDP. India has emerged as the largest milk producing country, with annual milk production of over
100 million tonnes. This is expected to grow to 135 million tonnes by 2015. The Indian retail market
for fresh fruit and vegetables is estimated at US$35 billion. Organised retailing is US$73 million and
growing at a rate of 30 percent. India has vast resources of livestock, estimated at 485 million. In terms
of population, India ranks first in buffaloes, second in cattle and goats, and third in sheep. According
to a recent study by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst
& Young, the India food industry is set to grow by 42.5% from US$181 billion now to US$ 258
billion by 2015 and by 76% to US$ 318 billion by 2020.
India: Global R&D Hub

The Indian government has put in significant effort in last 50 years to develop the scientific and
technical infrastructure of the country. With more than 250 universities, 1,500 research institutions and
10,428 higher -education institutes, India churns out 200,000 engineering graduates and another
300,000 technically trained graduates every year. Besides, another 2 million other graduates qualify
out in India annually. The combination of state-of-the-art infrastructure and highly qualified
manpower ensures that
India is poised to be the next Global R&D hub. This is increasingly being observed in
Industry as large MNCs including GE, Microsoft, Bell Labs etc have opened there R&D
Centers in India – a first outside US for most of these companies. More than 100
multinational companies (MNCs), including Delphi, Eli Lilly, Hewlett-Packard, Heinz,
Honeywell and Daimler Chrysler, have set up (R&D) facilities in India in the past few years.
For some, such as the US$12.6 billion Akzo Nobel's car-refinishes business, the center came
even before the company began selling its products in India. This makes India second only to
USA and ahead of other more established hubs, such as Japan, Israel and Western Europe,
and China.

Economic Thoughts: Context from Dharmashastras, Shukraniti, Mahabharata, and

Arthashastra, Kautilya’s Economic thoughts in specific.

Context from Dharmashastras

A wide-ranging term that appears frequently, not only in sections on business law but
throughout the Dharmashastras, is artha. The early Sanskrit texts speak of three legitimate
spheres of human activity, also known as the goals of life
(purushartha): dharma (righteousness), artha (material well-being) and kama (pleasure).
Later texts added a fourth goal, moksha (liberation). Within this scheme, artha is one of four
“human goods,” four things people should engage in and relish as people. Given the highly
spiritualistic representations of India, it is important to highlight that wealth, prosperity, and
material comforts were counted among the essential pursuits of humanity. Materialism as
such is not the point. Rather, a good life is measured in part by one’s ability to achieve a
comfortable life and the opportunity to enjoy it.
Wealth in the sense of artha is more than just legal property.
It is a way of viewing possessions as not inherently evil, but instead part of a full,
useful life. Within the pursuit of artha, material well-being, the distinguishing feature of
business in Dharmashastra is labha, or profit. Indeed, Vijnaneshvara defines it in just these
terms, “Business is buying and selling for the sake of making a profit” (Laws of Yajnavalkya
[1.119]). Over and over again, we have seen the profit motive acknowledged and even
praised within the context of business, as in the guiding quote of this chapter from Narada
(8.11). Profit is the desired and legitimate end of business. From the other side, Yajnavalkya
(1.276) points to the failure of merchants to make a profit or farmers to reap a successful
harvest as external signs that they are possessed by Ganapati, the lord of obstacles.
Alongside profits, businesses can make money through vriddhi (interest). The word literally
means, “increase, prosperity, what has grown,” and thereby comes to mean interest in a
technical sense. The Dharmashastras contain great ambivalence about making one’s entire
living by lending on interest. As with many ancient legal systems, usury was a socially
degraded practice and money-lending a socially suspicious profession, no matter how
lucrative. This practice and profession are referred to as kusida or varddhushya in the texts,
the latter of which implies an immoral, exploitative practice, and refers to excessive interest
via predatory loans.
The Dharmashastras contain great ambivalence about making one’s entire living by
lending on interest.
Vriddhi, by contrast, connotes growth and prosperous increase, even success. Reasonable
interest rates and schemes are the proper reward for supplying credit or capital to someone.
Everyone “wins” when interest is fair. Turning interest into a lifestyle or livelihood invites
the temptation to use loans selfishly to aggrandize one’s wealth at the expense of others.
Rather, proper interest should lead to financial gain together with gain for others too. Lending
at interest thus requires the virtues of restraint and empathy in order to make the transaction
mutually beneficial. Another frequent term with connotations of virtue in the business law
sections of the Dharmashastra is bhriti (wages), the money paid to employees and servants
for their work. Bhriti comes from a root that means “to bear, to support.” It thus means
something closer to one’s “means of livelihood,” the material support that makes life
possible.
Two terms for contract (samaya, samvid) highlight both the virtues of mutuality and
agreement necessary for business deals to conclude fruitfully. The prefix sam, “together,” is
used for many contractual words. Contracts are “moments” when parties “come together” to
make a deal or “know together” the details of an agreement. The texts emphasize the need for
contracts to be mutually beneficial; the texts hate technicalities of legal documents or
witnesses that produce imbalance or unfairness in contracts.
Productive business for the Dharmashastras…arises from relationships that business people
share, both through contracts and outside of them. The opposite of living up to one’s
promises and contractual obligations is called anapakarma (failure to perform), a term used
as part of several titles of business law. Failure to abide by contractual terms, failure to
deliver goods on time and failure to pay wages are just the most prominent examples of a
category that focuses on the duties people must observe when doing
business. Anapakarma means shirking one’s responsibilities, whether from laziness, greed, or
deceit. Whatever its cause, such failures are the basic reason we need laws for business in the
first place.
Eighteen other vices are traced back to greed.
Finally, the one terrible, unforgiveable root of immorality in Dharmashastra
is lobha (greed). Though it is directed towards the king, Laws of Manu (7.49) points to the
fundamental nature of greed as a source of immorality: “Wise men identify the root of both
sets of vice arising from pleasure (kamaja) and wrath (krodhaja), and it is greed (lobha). He
should diligently overcome it.” Eighteen other vices are traced back to greed, and it is
regularly cited as the cause underlying failures of business, governance, law and religion. The
texts portray kings, heirs, and bankers as particularly susceptible to greed, and many
admonitions are directed at them. This distinctly unvirtuous trait, however, creeps into many
other areas of life.

From both positive and negative angles, the vocabulary of business law in the
Dharmashastras promotes the cultivation of many virtues and the destruction of many vices.
For a tradition that we can only understand as legal, the importance of virtue raises the
perennial question of how the Dharmashastras purport to inculcate morality within the law.
Shukraniti
Shurukraneeti refers to the art and principles of effective governance and
administration in ancient Indian texts, particularly in works like Arthashastra attributed to
Chanakya (Kautilya). It encompasses a comprehensive set of guidelines and strategies for
statecraft, diplomacy, economics, and military affairs.
Shukracharya, author of Shurukraneeti known as Shukra, holds a significant place in
Hindu history and religious texts. He is revered as one of the most knowledgeable sages and a
revered figure in ancient Indian literature. Shukracharya is primarily known for his expertise
in various fields including astrology, medicine, and political science. The term
"Shurukraneeti" combines "Shura," which means valor or bravery, and "Kraneeti," which
translates to policies or strategies. Together, they denote a system of governance that focuses
on the practical application of ethical and strategic principles to manage and govern a state
successfully.
This doctrine emphasizes the importance of leadership qualities, ethical conduct,
diplomacy, economic policies, and the use of force when necessary for the stability and
prosperity of a kingdom or state. Shurukraneeti draws attention to the balance between
idealism and pragmatism, stressing the significance of ethical governance while
acknowledging the realities of politics and statecraft.

1. Wealth Generation and Management: Shukraneeti emphasizes the importance of

generating wealth through ethical means. It encourages prudent economic policies and
efficient resource utilization to create prosperity within a kingdom or state. The
management of resources, taxation, trade, and agriculture were all areas of focus to
ensure economic stability.
2. Role of Governance in Wealth Creation: Effective governance is seen as crucial in
fostering an environment conducive to wealth creation. Policies promoting commerce,
industry, and agriculture were encouraged to stimulate economic growth. Fair taxation
and regulations were also emphasized to maintain a balance between state revenue
and individual prosperity.
3. Diplomacy and Trade: Shukraneeti underscores the significance of international
relations and trade for economic well-being. Encouraging alliances, treaties, and
fostering trade relationships were considered essential for the prosperity of a
kingdom. Fair and favorable trade practices were promoted to enhance wealth
accumulation.
4. Financial Management and Fiscal Policies: The texts delve into the importance of
sound financial management within the state. This includes prudent budgeting,
managing expenditures, and maintaining a stable currency. Additionally, the texts
emphasize the need for a robust treasury and measures to prevent financial crises.
5. Ethical Wealth Acquisition: While wealth generation is encouraged, ethical practices
were highly valued. Shukraneeti emphasizes the importance of honesty, fairness, and
integrity in financial dealings, promoting ethical conduct in both personal and state
finances.
6. Understanding Economic Cycles: Shukraneeti acknowledges the cyclic nature of
economic prosperity and downturns. It advocates for policies that prepare for
 economic fluctuations, ensuring resilience during times of hardship and maximizing
opportunities during periods of growth.
7. Social Welfare and Wealth Redistribution: Shukraneeti advocates for the equitable
distribution of wealth and resources within society. It stresses the importance of social
welfare measures, such as charity, public works, and support for the disadvantaged,
ensuring that wealth isn’t concentrated in the hands of a few but benefits the entire
populace.
8. Encouragement of Innovation and Entrepreneurship: The doctrine promotes an
environment conducive to innovation and entrepreneurship. It encourages the
development of skills, education, and technology to foster economic growth.
Additionally, it supports policies that incentivize and reward innovation and
entrepreneurial endeavors.
9. Importance of Monetary Stability: Shukraneeti emphasizes the significance of
maintaining a stable monetary system. It suggests measures to control inflation,
regulate currency circulation, and ensure the stability of the financial market to
safeguard the wealth and investments of the citizens.
10. Long-term Sustainability and Resource Management: Recognizing the finite nature of
resources, Shukraneeti underscores the importance of sustainable resource
management. It encourages policies that prevent overexploitation of natural resources,
promote conservation, and strategize for long-term sustainability to ensure future
economic prosperity.

Mahabharata

The Epic Mahabharat deals with concepts that are relevant to the modern erahence, it
is perennially fresh and contextual. We connect easily with such literature and think, feel, and
discuss with utmost seriousness.
We identify ourselves with the characters and situations and get into heated arguments as if
we are the characters involved. Vedavyasa’s Fifth Veda never gets outdated. It is as fresh as
the morning sun rays or the first drops of the rainy season.
Interestingly not only the gripping storyline but also various topics explored in the Epic make
it an experience to cherish. Economics embedded in this epic enlightens and amazes us to a
great extent.
The great Vedavyasa explored this aspect also in his war-ridden epic rather thoroughly
through discussions among the central characters. A number of incidents in the epic discuss
economy and trade.
Through these discussions, we know about the way economy and trade was handled in those
days, and how the other wings of the administrative system functioned. We get an
understanding that enables us to assess the facts.

A look into the facts

Narada in Sabha Parva discusses topics related to economy when he visits Pandavas at
Indraprastha in Sabhaparva.
Vaisampayana continued, “The great ascetic Narada, having answered Yudhishthira thus,
again asked the just ruler, ‘Do the officers of thy government, O king, that are paid from the
taxes levied on the community, take only their just dues, from the merchants that come to thy
territories from distant lands impelled by the desire of gain?
Are the merchants, O king, treated with consideration in thy capital and kingdom, capable of
bringing their goods thither without being deceived by the false pretexts of (both by the
buyers and the officers of government)? (2.5.6)
In fact through Narada’s questioning of Yudhisthira, and his own elaborations on these topics
Vedayavsa presents the ideal economic system, trade, defense, agriculture, and other
important features of state administration at that time.
Narada asks the king whether or not his expenditures are about 1/4th, 1/3rd, or at worst 1⁄2 of
his income, and whether his accountants apprise him of his income and expenditure every
forenoon. He wonders if wage payments to artisans are not delayed by more than 4 months
and that there are no arrears to payment to the soldiers as well. He expects that the king must
applaud and reward good work done by the artisans.
Narada mentions that there are four commercial activities (vaarta), namely, agriculture, trade
and commerce, animal husbandry, and lending at interest, that lead to the economic welfare
of the people. He questions whether the king ensures that these activities are carried out by
honest men. He asks whether or not the king helps farmers by extending loans for seedlings
at a rate not exceeding 1/4th of the produce.
Narada also hopes that since officers are paid for by the taxes collected from the citizens,
they must treat merchants coming from faraway places fairly and collect only the just dues
from them.
Narada even touches upon the issue of pay hike, indicating that there used to be a pay hike
depending upon one’s performance. He questions Yudhishtir whether his servants, who have
special ability to accomplish a particular business, get disappointed because of not getting
any pay hike!
Narada hopes that the king is rewarding the people with gifts of wealth proportionate to their
qualifications. Thus, Narada alerts Yudhiṣṭhira about his important role in market facilitation.
Some more questions posed by Narada to the king

Are you knowledgeable about profit yielding ventures?

Are you in close contact with agriculturists of your country?
Are you having employees who have the practical experience and at the same time
incorruptible?
Are you surveying your own strength and that of your rivals in-country, forts, cars, elephants,
cavalry, foot-soldiers, the principal officials of the state, food supply, computations of the
army and income, the religious treatises in force, the accounts of state, the revenue, wine-
shops, and other things?
All these questions together form a theory of the ideal economy that should be followed to
provide good governance. An extensive and elaborate one-sided speech of Narada hence
helps us know much about economics, finance, and trade in the Mahabharata times.
In Shanti Parva (Chapter 68) Bhishma speaks on this subject. He says that a king should take
one-sixth of the income of his subjects as a tribute for meeting the expenses of protecting
them. He should also forcibly take away the wealth, much or little (as the case may require),
from the ten kinds of offenders mentioned in the scriptures, for the protection of his subjects.
Bhishma also notes the importance of and dependence on trade and agriculture. He ascertains
the role of Vaishyas in assisting the king, by upholding the safest measures of economy-
based trade.
The ruler should enlighten the Vaishyas of his plans of building a wall round the city,
spending money for defence purposes, keeping a share to be spent on the public welfare
system and other essential things to be attended upon.
Then he should collect the required taxes from them. He should not burden them by imposing
heavy taxes which makes them desert their own country. Suitable protection should be given
to them and their businesses.
Required arrangements should be made regularly to ensure that their businesses run steadily.
At frequent intervals, they should be given awards/gifts, and thus their trust must be won.
Appropriate rewards should always be given to the traders and merchants for their efforts.
Because, Vaishyas develop and improve the nation’s agriculture, cattle-rearing, and trade.
On the whole, King should work in harmony with the merchant class to make his country
wealthy and prosperous with the right kind of economic infrastructure.
Arjun explains the importance of wealth

Arjun was not only the best warrior of his times but also was an expert in Arthashastra. His
views on wealth (finance), trade, and punishment are interesting and thought-provoking.
Samaptavachane Tasminnarthashastravisharadah |
Partho Vakyarthatattvaj~No Jagau Vakyamatandritah || (12.87)
Vaisampayana continued, “After Vidura had finished what he had to say, Pritha’s son Arjuna,
well skilled in the science of profit, and conversant also with the truths of both Virtue and
Profit, urged on (by the drift of Yudhishthira’s question), said these words.”
Arjuna said, “This world, O king, in the field of action. Action, therefore, is applauded here.
Agriculture, trade, the keeping of cattle, and diverse kinds of arts constitute what is called
Profit. Profit, again, is the end of all such acts. Without Profit or Wealth, both Virtue and (the
objects of) Desire cannot be won.
This is the declaration of the Sruti. Even persons of uncleansed souls, if possessed of diverse
kinds of Wealth, are able to perform the highest acts of Virtue and gratify desires that are
apparently difficult of being gratified.
Virtue and Desire are the limbs of Wealth as the Sruti declares. With the acquisition of
Wealth, both Virtue and the objects of Desire may be won. (12.161)
Here Arjuna declares that Profit is constituted with agriculture, trade, cattle breeding, and
diverse kinds of arts.
Wealth important for sustenance
Arjuna elaborates on the need to acquire wealth and his words stand true generations later,
even today. He says:
‘Without wealth, a man cannot find the very means of sustaining his life.
He that has wealth has friends. He that has wealth has kinsmen. He that has wealth is
regarded as a true man in the world.
He that has wealth is regarded as a learned man. If a person who has no wealth desires to
achieve a particular purpose, he meets with failure.
Wealth brings about accessions of wealth, like elephants capturing (wild) elephants.
Religious acts, pleasures, joy, courage, wrath, learning, and a sense of dignity, all these
proceed from wealth,
From wealth, one acquires family honor.’
Bhishma also substantiated the same thought in his conversation with Yudhishtira that the
path of policy is consistent with the aggregate of the three (viz., Virtue, Profit, and Pleasure).
Guided by this Sruti, any King can win prosperity by protecting people. (12.138)
There is much more in Mahabharatathat brings forth discussions about the economy of the
day and the functioning of trade. That was why ‘Whatever we see here, we see elsewhere.
Whatever we cannot see here, we won’t see anywhere else.’
Dharme Charthe Cha Kame Cha Mokshe Cha Bharatarshabha |
Yadihasti Tadanyatra Yannehasti Na Tatkvachit || (I. 56.33)
Arthashastra

Ancient India was a storehouse of knowledge and during this time many researchers
and intellectuals emerged and stunned the whole with their innovations and thoughts, be it the
great mathematicians Aryabhatta and Bhaskaracharya or be the great surgeon Sushruta, just
like the ones who are mentioned above one such intellectual was Kautilya, who was also
known as Chanakya and Vishnugupta. He was the contemporary of the great Greek
philosopher Aristotle. He wrote the book which is mentioned and which is also the topic of
our study the “Arthashastra”. Arthashastra is fundamentally a book a book of state
management and a guide to the means of procurement and preservation of the wealth.
The ‘Arthashastra’ was not merely a book on principles of wealth or money like the books
of western economic thinkers. Kautilya took the term wealth in a very wide sense. According
to Kautilya, wealth is necessary for a state/ king remaining sovereign but the management of
wealth, in modern terms, resource management is equally important to preserve the
sovereignty of the emperor.The book also mentions frequently that the king must keep his
subjects happy and should not impose any tyrannical rules except during emergency. He has
also pointed elsewhere: even a robust emperor cannot survive without his people being happy
and prosperous but at the same time, he thought, a strong and wealthy kingdom would be in a
position to protect the interest of people against the invasion of other kings. In simple words
we can say that Arthashastra was based upon 2 broad objectives which were i) resource
maximization and also their optimum management ii) implying the methods of resource
collection which may bring about maximum prosperity without killing the economic
incentives. Though, he did not explain economic theories exclusively, however, his treatment
of formulating the principles of state craft made the modern days economists realize that he
was well acquainted with some fundamental ideas of economics.Now let us see some of the
comparisons between the two.

The comparison of “Arthashastra” and modern economics

1) Demand and Supply: Kautilya was well-versed in today's key economic ideas of demand
and supply, as well as their combined influence on price setting. A king, in his opinion,
should not establish the price of a product arbitrarily without considering supply and demand
conditions. Without proper consideration of demand and supply price cannot be said to be an
equilibrium price without sufficient consideration of demand and supply has the potential to
increase the well-being of both consumers and producers. This concept is very close to the
idea of the” invisible hand” by Adam Smith, the Father of Modern Economics is known for
his "invisible hand." Kautilya was well aware of the situation. As a result, he attempted to set
a profit limit that would account for both. Businessmen were authorized to make a profit of 5
to 10% on their operations. The existence of both state-run and privately held businesses may
be witnessed in the Kautilya period. As a result, there is a natural conflict of interests between
them. However, he recommended a solution to avoid this type of conflict by advocating some
pricing parity that does not hinder the private sector's drive. According to Kautilya, the state
should not set prices without taking into account the cost of production, the supply-demand
ratio, the fair level of profit, and so on. In a glut (overproduction) situation, the state was
supposed to intervene and centralise product sales so that prices did not fall below a
particular minimum level, which is now commonly referred to as a price floor.
2) International Trade : Kautilya, like Ricardo and other modern western economists,
believed strongly in the benefits of international trade. He felt that foreign commerce may
boost the economies of trading nations. He promoted international trade and dispatched
experts to investigate foreign markets in order to classify items into exportable and
importable categories. He envisioned increased consumer opportunities and economic gains
as a result of boosting international trade. However, foreign trade was banned by the
government during the time of Kautilya.
3) Interest and Profit ( A Function of Risk, Uncertainty and Productivity): Risk and
uncertainty were factored into the profit and interest levels by Kautilya. He stated that
increasing levels of risk and uncertainty must be compensated with bigger earnings and
interests. He stipulated that profit margins on imports be double those on indigenous items.
Profits on imports were allowed to be 10%, while profits on domestic products were allowed
to be 5%. The reason for this was obvious. Importers of foreign goods faced a high risk of
being robbed and looted during the shipment of items from other countries back then.
Kautilya's definition of profit is quite similar to Knight's current profit theory, which
maintains that profit is the sum of all gains is the unpredictability's reward. Kautilya preferred
to charge interest on loans, but the rate of interest was too high. The state governed it. He
believed that the rate of interest should be determined by two factors: the risk involved and
the capital's production. For the traders, the interest rate was greater. However, it was lower
for personal reasons, such as weddings or funerals. Furthermore, depending on the riskiness
of the trade, interest rates varied for different types of trades of the business venturesHence it
is observed that determination of interest rate considered both elements – risk and
productivity of the loan. Human consideration of interest payment was also observed. Certain
groups of people, such as, inability to pay, students etc. were exempted from paying interest.
However, they had to come through proper legal system to avail such exemption. Hence,
differentiated interest rate structure depending on the purpose of loan were prevailed at that
time which is very much similar to modern days borrowing and lending system of banks and
financial institutions.

4. Economy & Society

The economy was based on agriculture, as it was in most if not all ancient
civilizations, and so Kautilya emphasizes the importance of robust agricultural initiatives for
an abundant harvest which will go toward filling the state's treasury. Taxes, however, must be
fair to all and easily understood by the king's subjects. Some businesses were state owned and
operated and others were private, but both were subject to the same tax laws. No one,
Kautilya writes, is to be considered above or outside of the law, whether in regard to taxation
or any other aspect of society, so that people can feel confident that the laws are just and they
are protected and cared for.
This paradigm is clearly seen in the law code of the Arthashastra where it is stipulated that
the punishment must fit the crime; too lenient, and it serves as no deterrent but, too harsh, it
appears unjust. Punishment, therefore, must be administered in accordance with clear and
established law and custom so that it is understood as the just consequences of one's actions
in defiance of that law and with full knowledge of what one must expect for breaking it. Book
III of the text outlines civil law while Book IV deals with criminal law. Any infraction which
fell under criminal law was pursued with the State as plaintiff, since such crimes were
considered injustices perpetrated against the State (and so the people as a whole) with State
officials serving also as the prosecution.
The social customs addressed adhered to Hindu traditions but the Arthashastra goes to some
lengths in stipulating how marriages should operate. According to traditional Hindu custom,
the parents of a girl would arrange a marriage with an acceptable boy of the same caste who
showed promise of financial stability and a bright future. Kautilya, in Books II, III, and IV,
states that a girl should be free to marry anyone she chooses as long as she respects her
parents' property rights. If the parents approve of, or arrange, a marriage then the girl may
take from her parents' home anything she has received from them; if not, then she may take
nothing. Couples who marry for love, with their parents' approval, are to be considered the
most fortunate and receive the maximum in property, rights, and gifts from their parents.

5. Human Aims:-
Adherence to the Karma based varna system was thought to encourage the pursuit of what
was considered Human Aims:
 Artha – acquisition of material wealth, pursuit of career, home life
 Kama – love and sensual pleasure,
 Moksha – self-actualization, liberation, enlightenment
The proper behavior of a strong, just king ensured the stability for his subjects to pursue these
aims within the strictures of their respective castes. Throughout the entirety of
the Arthashastra, it is made clear that the king is solely responsible for how well the kingdom
functions and so the king must be willing and able to pursue any course of action, no matter
how seemingly questionable or personally distasteful, to ensure the stability and success of
the State.

Kautilya’s Economic thoughts in specific

a. Dharmic Capitalism
There are three pillars to Kautilyan dharmic capitalism: A rule-based yet non-intrusive
state, wealth creation through a global outlook and the need for sustainable growth and
welfare.
b. Rule-based Yet Non-intrusive State
The role of the state, as conceptualised by Kautilya, is one that is firm and rule-based yet
not intrusive in its implementation. The plethora of rules and regulations for various
industries indicates a rule-based framework for governance as opposed to an excessively
planned economy. For example, let’s take trade policy for instance. As we detail later in the
book, Kautilya wanted fixed duties and tariffs for products and exempted some of these for
imports to boost trade between the borders of different kingdoms. While the basic tenets are
strictly followed, there is no ‘executive planning’ of sorts in its execution.
There seems to be no limit on the productive capacities of firms pertaining to what they
produce and how they produce. The focus seems to be mainly on having a robust regulatory
and legal framework that is strictly implemented. Otherwise, the nitty-gritty of the processes
is flexible enough to ensure that they function properly and as per consumer interests. The
focus of all of Kautilya’s thinking on implementation is on the consumer’s best interests,
which is contrarian to the role of what is called a ‘planned economy’ in modern parlance.
Does this mean that the state is not interventionist at all? Not really. Kautilya seems to feel
the need to intervene when the market is not able to sort out certain things. For example, as
we detail in the ‘Sustainable Growth and Welfare’ chapter, Kautilya feels strongly about the
need for matsya nyaya, which means ensuring that small firms do not get overwhelmed by
bigger or dominant firms. In this particular case, he feels the need to intervene so that the
richer firms/people pay their fair share of income so that inequalities are not exacerbated.
This is an instance where he feels the state needs to ‘nudge’ the policy in a way that ensures
parity to the people in the kingdom.
c. Wealth Creation Through a Global Outlook
At a macro level, Kautilya seems to be inclined towards a global view of the economy.
This has three components: a vibrant international trade environment through ease of doing
business, utilising natural resources and traits of the populace, and enabling investment from
savings to drive growth in a variety of areas, including infrastructure.
International trade was integral to the functioning of the Mauryan dynasty and the free
exchange of knowledge and trade seems to be ingrained in his approach. While he is
cognisant of the need to protect domestic interests as well, his policies seem to indicate an
expansionist view of the economy. For example, his exemptions and incentives for imports
and the efforts taken to make ‘ease of doing business’ a reality in the kingdom indicate his
worldview on this topic.
Furthermore, the emphasis on creating a friendly business environment is self-evident with
his focus on streamlining tax measures for all the products being traded.
Infrastructure development through highways, roadways and maritime routes further
reiterates that he viewed trade as more of a boon to his kingdom than anything else. It is
important to note that the key highways such as the Uttarapath and Dakshnipath (discussed
later in the ‘Wealth Creation’ chapter) were improved and strengthened significantly during
the Mauryan rule. Kautilya felt the need to enhance the trade infrastructure to enable better
commerce among trading partners. In summary, he felt the need to create wealth through an
internationalist mindset and approach.
India and Global GDP: Ancient India
Ancient India had a substantial impact on global GDP, especially during the classical
period (around 1st millennium BCE to the 6th century CE). It was one of the world's most
significant economic centers, renowned for its trade, agriculture, and cultural exports.
During this time, India contributed a significant share to the global GDP, primarily due to its
trade relations with various civilizations, including the Roman Empire, Southeast Asia,
China, and the Middle East. Indian exports such as textiles, spices, precious stones, and other
luxury goods were highly sought after, contributing significantly to its economic prowess.
The Indus Valley Civilization (around 3300–1300 BCE) was an early urban civilization in
ancient India known for its trade networks within the region. Later, during the Maurya and
Gupta empires (circa 4th century BCE to 6th century CE), India experienced periods of
economic prosperity and cultural advancements.
The Mauryan Empire, under the rule of Emperor Ashoka, expanded trade routes and
infrastructure, which stimulated economic growth. The Gupta period is often referred to as
the "Golden Age of India," marked by advancements in science, mathematics, art, and trade.
India's influence extended across Asia through its trade networks, further boosting its
contribution to the global economy.
Estimating the precise contribution of ancient India to the global GDP is challenging due to
limited historical records and differing methodologies. However, historical accounts and
archaeological evidence suggest that India was a major economic player with a substantial
impact on the world economy during that time.

1. Trade and Commerce Networks: Ancient India boasted extensive trade networks
that connected it with various civilizations like the Roman Empire, Southeast Asia,
China, and the Middle East. These connections facilitated the exchange of goods,
including textiles, spices, precious stones, and other luxury items. These commodities
were highly sought after in international markets, contributing significantly to India's
economic wealth.
2. Indus Valley Civilization's Contribution: The Indus Valley Civilization, one of the
world's earliest urban societies, was engaged in trade within its region, showcasing a
foundation for India's later economic developments. Archaeological findings suggest
well-planned cities and trade routes, hinting at a thriving economy.
3. Mauryan Empire's Economic Impact: During the Mauryan Empire, particularly
under the reign of Emperor Ashoka, India saw an expansion of trade routes and the
development of infrastructure like roads and ports. This expansion facilitated trade
and commerce, contributing to economic growth.
4. Gupta Empire's Golden Age: The Gupta period is often referred to as India's
"Golden Age." It witnessed significant advancements in science, mathematics, arts,
and trade. Indian cultural influence extended across Asia through trade networks,
enhancing India's economic significance.
5. Challenges in Quantitative Comparison: While these historical periods contributed
immensely to India's economic standing, assessing their precise contribution to the
global GDP is challenging. Historical records are limited, and methods for measuring
GDP in ancient times differ significantly from modern methodologies. Direct
quantitative comparisons are thus difficult, but historical evidence and accounts
suggest that ancient India played a substantial role in the global economy.
Beyond Capitalism and Communalism:
Indian economic thought often diverges from the conventional paths of capitalism and
communism, offering a unique approach that integrates elements from both while
incorporating indigenous philosophies. Here's an expansive comparison:
Communism:
Communism, with its emphasis on collective ownership of resources and the means of
production, contrasts with traditional Indian economic thought in several ways. While
communism advocates for a centralized control structure, Indian economic philosophy
historically cherishes decentralized decision-making, evident in its village-based governance
models and community-centric approaches.
The idea of communal living and resource-sharing in communism has similarities to certain
aspects of Indian societal frameworks, particularly in ancient communities where sharing
resources and a sense of collective responsibility were prevalent. However, Indian economic
thought typically respects individual enterprise and promotes self-sufficiency at the
grassroots level, which aligns more with capitalism than communism.
Capitalism:
Indian economic thought diverges from capitalism in its emphasis on social welfare
and a more inclusive economic growth model. While capitalism emphasizes free markets and
private ownership as drivers of economic growth, Indian economic philosophy seeks a
balance between individual enterprise and societal welfare.
The concept of 'Dharma' or duty in Indian philosophy underscores the responsibilities of
individuals and communities towards each other and the environment. This notion aligns with
a more regulated form of capitalism that integrates social responsibility and ethical business
practices.
Distinct Indian Economic Approaches:
1. Mixed Economy: India adopted a mixed economy post-independence, blending
socialist principles with democratic values. It emphasized state intervention in key
sectors while allowing private enterprise to flourish. This approach aimed to address
social inequalities and promote economic growth.
2. Gandhian Economics: Mahatma Gandhi advocated for decentralized economic
structures, emphasizing self-reliance, village-based industries, and sustainability. His
philosophy centered on 'Sarvodaya,' the welfare of all, focusing on the upliftment of
the weakest sections of society.
3. Amartya Sen's Capabilities Approach: Nobel laureate Amartya Sen's economic
thought focuses on enhancing individual capabilities as a means to achieve economic
development. His approach stresses the importance of education, healthcare, and
freedom of choice in improving people's lives.

Ancient Indian economic principles, rooted in texts like the Arthashastra and Manusmriti,
diverge from the paradigms of capitalism and communism in several ways:
1. Dharma and Economic Activities:
 Ancient Indian thought emphasized the concept of 'Dharma,' which
encompassed moral, ethical, and social duties. Economic activities were
 expected to align with Dharma, promoting ethical conduct in trade, wealth
distribution, and resource utilization.
2. Varna System and Economic Roles:
 The Karma based Varna system categorized society into four classes, each
with specific roles. While often associated with social structure, it also defined
economic responsibilities. The emphasis was on a cooperative framework
where each class contributed to the economic well-being of society.
3. Self-Sufficiency and Village Economy:
 Ancient Indian economic thought upheld the importance of self-sufficiency at
the village level. Agrarian communities were encouraged to be self-reliant in
food production and basic needs, fostering economic independence.
4. State Intervention and Governance:
 The Arthashastra, attributed to Chanakya, highlighted the role of the state in
economic governance. It advocated for state intervention in regulating
markets, fixing prices, and ensuring social welfare through various policies.
5. Social Welfare and Charity:
 The concept of 'Daana' or charity held significant importance in ancient Indian
society. Wealth distribution and supporting the less fortunate were integral
parts of economic practices, aiming for social welfare.
Ancient Indian economic principles, while distinct from capitalism and
communism, encompassed a blend of ethical, social, and practical considerations.
They emphasized the harmonious functioning of society, ethical conduct in economic
activities, and the integration of economic prosperity with social welfare and moral
values. This holistic approach sought to create an economic system that balanced
individual pursuits with the greater good of society.

Caste as Social Capital

The concept of caste in India has been traditionally associated with social structure, defining
roles, occupations, and social hierarchy. However, viewing caste as social capital involves
examining it through the lens of sociological and economic perspectives.

1. Social Networks and Resources:

Caste can function as a form of social capital by creating networks and connections
within communities. These networks can be a source of social and economic support,
providing access to resources, information, and opportunities.
2. Economic Advantages and Disadvantages:
Within certain castes, there might be established economic advantages, such as access
to specific professions, specialized skills, or business networks. These advantages, when
leveraged effectively, can contribute to economic success.
Conversely, caste-based discrimination and social exclusion can hinder economic
progress for individuals belonging to lower castes, limiting access to education, employment,
and economic opportunities.
3. Social Cohesion and Cooperation:
 Caste-based communities often foster strong bonds and solidarity among their
members. This social cohesion can translate into cooperative efforts, mutual
assistance, and collective endeavors, potentially benefiting economic activities within
the community.
4. Limitations and Challenges:
While caste-based social capital can offer advantages within certain circles, it also
perpetuates social divisions and inequalities. The rigid caste system historically
restricted social mobility and created barriers for individuals to advance
economically.
5. Changing Dynamics:
In contemporary times, there's a gradual shift towards breaking down caste barriers,
especially in urban areas, where education, skills, and merit are gaining more
prominence than caste identities in certain spheres.

Black Money, and Tax Heaven

"Black money" refers to funds that are earned through illegal means or on which taxes
haven't been paid. This money is often concealed from the authorities to avoid taxation or to
hide its illegal source.

“Tax havens” are jurisdictions that offer favorable tax treatment and financial secrecy to
individuals and businesses.
They can be further explained as follows:
Black Money:
 Illegal Earnings: Black money is generated through various illegal activities like
corruption, drug trafficking, smuggling, tax evasion, and other criminal activities.
 Tax Evasion: Individuals and businesses might generate black money by
underreporting income or inflating expenses to evade taxes.
 Consequences: It undermines a country's tax system, reducing government revenue
needed for public services, infrastructure, and social welfare programs. Additionally,
it contributes to economic inequality and hampers the formal economy.
Tax Havens:
A. Favorable Tax Regimes: Tax havens offer low or zero tax rates, financial privacy, and
lenient regulations, making them attractive for individuals and businesses seeking to
minimize tax liabilities.
B. Financial Secrecy: These jurisdictions often provide secrecy laws that shield the
identity of account holders and the details of financial transactions from authorities in
other countries.
C. Global Impact: Tax havens can facilitate tax evasion, money laundering, and illicit
financial flows globally, impacting the economies of other nations by depriving them
of tax revenue.
Agriculture: Ancient India
Agriculture in India dates back to 9000 BCE i.e. nearly 11,000 years ago. It all started
with the cultivation of plants and domestication of animals. India was the largest producer of
wheat and grains. Double monsoons helped in reaping two harvests in a year. This helped
Indian products reach worldwide through trading networks. Plants and animals contributed a
lot for the survival of humans and from then Indians started worshipping few animals.
Between the 5th to the late 15th centuries irrigation channels reached new heights and Indian
crops started affecting the economy of other countries. Land and water management systems
were developed and the Republic of India started developing agricultural programmes.
a. The Neolithic Revolution
The Neolithic Revolution also called the First Agricultural Revolution began around
8000-4000 BCE. During this period farmers started:
 planting crops in a row,
 storing grains in a storehouse,
 wheat and barley cultivation began and
 rearing cattle, sheep and goats became quite common.
By the 5th millennium, approximately between the years 5000 BC to 4001 BC, agricultural
communities started spreading in Kashmir and cotton had already started cultivating. Fruits
such as mango and muskmelon were grown. Indians started growing hemp which was widely
used in producing fiber and oil. Peas, sesame and dates were widely cultivated in North India.
b. Indus Valley Civilization
The Indus Valley Civilization dates back to 4500 BCE and this is when irrigation had
started. Irrigation, water storage systems, reservoirs and canal irrigation systems were all
developed during this period. Outside the Indus Valley area there were other regions that
contributed a lot towards agriculture i.e, the Deccan Plateau and areas within Orissa and
Bihar. Millets and pulses were grown large in these areas and engaged a lot in herding cattle,
sheep and goats. In the eastern parts of India people grew rice and pulses in large numbers
and also kept cattle, sheep and goats.
c. The Iron Age
The Iron Age dates back to 1500 BCE to 200 CE. During this age Jute was cultivated
at large and was used to make ropes and cords. Animals which were considered vital for
human survival were worshipped, trees such as peepal and banyan were also worshipped.
Other plants were known for their medicinal values and this is when Ayurveda came into
play. There is evidence in vedic texts that agricultural technologies and practices were used in
cultivation of vegetables, fruits, cereals and animal husbandry. Farmers ploughed the soil,
planted seeds and started cropping in a certain sequence. They also started using cow dung as
a fertiliser. During this era people started differentiating soils and made meteorological
observations for agriculture.
d. The Early Common Era
This dates back to 200-1200 CE. Tamilians started cultivating crops such as millets,
rice, black pepper, sugarcane, cotton, tamarind, palm, sandalwood, jackfruit, coconut, etc.
Ploughing, manuring, weeding, crop protection were all practiced in common. A dam named
Kallanai was built near the Kaveri river.
Spices such as black pepper and cinnamon were traded to the Mediterranean. Crystallized
sugar was discovered during this period and the process of candied sugar transmitted from
India to China which made Buddhist monks visit India for obtaining the technology of sugar
refining.
During the Chola empire i.e., between 875-1279 there was a reform. Collective holding of
land by a particular group of people slowly moved to individual plots, each plot with its own
irrigation system. This reduced the areas of dry cultivation as water was distributed by tank
and channel networks.
e. The Late Middle Age
Between the 1200-1526 CE construction of water works were prominent. This
resulted in economic growth. Agricultural zones were classified and rice production
dominated Gujarat and North and Central India dominated in wheat production. Sugar mills
were set up during this era.
f. The Maratha Empire
The population in India accelerated during this era 1526 - 1757 CE. Crops like wheat,
rice, barley, cotton, indigo were all grown large. New crops such as maize and tobacco were
introduced. Indian crops were spread across North Africa, Spain and the Middle East.
Chattrapati Shivaji Maharaj initiated various agricultural reforms in favour of farmers and
agrarian community. At this time Indian farmers were far more advanced than farmers across
Europe.
g. The Colonial British Era
Between 1757 to 1947 CE commercial crops such as cotton, wheat, rice paved their
way to the global market. Punjab, Andhra Pradesh and the Narmada Valley were recognized
as the centers of agrarian reforms. The British regime in India did supply irrigation works but
not up to the scale. The price of agricultural commodities grew three times. A report in the
form of palm leaf manuscripts at the Thanjavur Tamil University gives us data on how
agricultural production was in about 800 villages around Chennai between 1762 and 1766.
h. The Republic of India.
After 1947 CE a lot of special programmes were introduced to improve the crop
supply. Campaigns such as The Grow More Food, Integrated Production Programme focused
on the supply of food and cash crops followed by the Five year plans of India very soon.
Land development, electrification, use of chemical fertilizers soon came under the
government supervision. Green revolution, Yellow revolution, Blue revolution all started off
from the 1960's which resulted in a significant growth in the agricultural sector.
i. White Revolution
This was launched in 1970 and is said to be one of the largest initiatives by the
National Dairy Development Board of India. The main objective was to set up dairy
cooperatives in 10 states. White Revolution is also considered to be one of the world's biggest
dairy development programmes. It literally transferred India from being a milk deficient
nation to one of the largest milk producers in the world.
Below Varghese Kurien, the founder & chairman of #Amul, about 700 towns and cities
became consumers of milk. This reduced the variations in milk price and also helped milk
producers get a major share of income as cooperatives were formed.
By the end of 1981 there were about 13,000 dairy cooperatives covering nearly 15,000
farmers. In 1985 the numbers increased to 136 milk sheds, 34,500 village dairy cooperatives
and over 36 lakh members. Finally in 1996 there was massive growth with nearly 73,300
dairy cooperatives and over 9.4 million farmer members.
j. The contribution of agriculture and livestock towards GDP
The agricultural sector of India contributes the highest to its economy when compared to the
other countries in the world. Agriculture in India contributes nearly 20.19% whereas other
countries contribute only 6.4% approximately.
Livestock play a major role when we talk about the Indian economy. Nearly 20.5 million
people depend on livestock for their livelihood which means 8.8% of the population are
employed by livestock. It contributes nearly 4.11% to the GDP.
k. Agricultural imports and exports
Cereals, spices, tea, coffee are some of the major exports and the value of agricultural exports
when compared to other exports nealy contributes 15 to 20%. Agri imports are only a small
percent. Between 96-97 and 99-2000 agri imports ranged only 4 to 7% of the total imports.
This is when a strong middle class in India became the main consumers of vegetables, fruits,
dairy, fish, meat, etc. Agricultural exports started growing by 10.1% every year. Contract
farming increased. After independence India became the largest producer of wheat, spice,
edible oil, tea, etc and the Ministry of Agriculture started overseeing all agricultural activities.
Organisations such as the Indian Council of Agricultural Research, National Dairy
Development Board and the National Bank for Agriculture and Rural Development were set
up to help farmers.
Manufacturing in Ancient India:

Ancient India fostered a vibrant and diverse manufacturing landscape, where skilled
artisans and craftsmen excelled in a multitude of industries. Renowned for its rich heritage in
textiles, metallurgy, shipbuilding, and various other crafts, ancient India stood as a center of
innovation and excellence in manufacturing. From the intricate weaving of fine textiles to the
mastery of metallurgical techniques, the craftsmanship of ancient Indians not only met local
demands but also garnered international acclaim, establishing India as a prominent
contributor to the global trade network of antiquity. This thriving manufacturing prowess,
coupled with specialized knowledge in various domains, significantly shaped India's cultural
identity and economic significance in ancient times.Ancient India was a hub of
manufacturing and craftsmanship, known for its excellence in various industries. Here are
some key aspects of manufacturing in ancient India:

1. Textiles:Indian textiles were highly prized and renowned worldwide. Fabrics like
muslin, silk, cotton, and wool were produced with advanced weaving techniques. The
fine quality and intricate designs of Indian textiles were in high demand in ancient
trade networks.
2. Metallurgy: Ancient Indians were skilled metallurgists. They excelled in the
extraction and processing of metals like copper, iron, bronze, and later steel.
Techniques like the use of crucible steel (Wootz steel) for making high-quality swords
were well-known.
3. Shipbuilding: Coastal regions in ancient India were centers for shipbuilding. The
Harappans, for instance, had maritime trade links and advanced shipbuilding methods.
They constructed sturdy boats for trade in the Indian Ocean.
4. Pottery and Ceramics: Indian pottery displayed a wide variety of techniques and styles
across different regions and periods. From the Indus Valley Civilization's well-crafted
pottery to intricate terracotta art, ancient Indians showcased remarkable pottery skills.
5. Jewelry and Crafts: Jewelry-making was a significant craft in ancient India. Skilled
artisans crafted intricate jewelry using various materials like gold, silver, gems, and
beads. The craftsmanship in sculptures, woodwork, and stone carving was also highly
advanced.
6. Paper and Writing Materials: India contributed significantly to the development of
paper and writing materials. Early forms of paper were created from materials like
bark, leaves, and rice husks. The use of materials like palm leaves for writing and
manuscripts was prevalent.
7. Trade and Specialization: Trade routes connected different regions, fostering
specialization in various industries. Different areas became renowned for specific
products due to their expertise and available resources.
8. Spices and Perfumes: India was celebrated for its production of spices and aromatic
substances. Spices like pepper, cinnamon, cardamom, and others were cultivated and
processed meticulously. These commodities were highly valued and traded
extensively with other civilizations, contributing to India's economic prosperity.
 9. Medicinal and Herbal Products: Ancient Indian knowledge of medicinal herbs and
plants was extensive. Ayurveda, the ancient Indian system of medicine, emphasized
the use of natural remedies. Herbal products, oils, and medicines were manufactured
using intricate processes and were in demand both domestically and in international
trade.
10. Urban Planning and Construction: Cities in ancient India showcased advanced urban
planning and construction techniques. Cities of the Indus Valley Civilization, such as
Mohenjo-Daro and Harappa, demonstrated sophisticated drainage systems, well-
planned streets, and sturdy brick structures. Later, during the Mauryan and Gupta
periods, cities like Pataliputra were known for their architectural advancements.

These facets highlight the diverse range of manufacturing and craftsmanship in

ancient India, encompassing not just physical goods but also knowledge-based products like
medicines and the advancement of urban infrastructure. The expertise in various industries
and the quality of goods contributed significantly to India's prominence in ancient global
trade networks.
Education in India

During the ancient period, two systems of education were developed, Vedic, and
Buddhist. The medium of language during the Vedic system was Sanskrit, while those in the
Buddhist system were pali. During those times the education was of Vedas, Brahmanas,
Upnishads, and Dharmasutras. India boasts a deep-rooted history of learning and education
dating back to ancient times. Knowledge has been transferred from generation to generation,
either orally or in writing. One distinctive aspect of the ancient Indian or Hindu civilization is
its shaping and formation, predominantly influenced by religious factors rather than political
or economic forces. The fundamental aspects of social, political, and economic life were
synthesized into a comprehensive theory known in Hindu thought as Religion. This holistic
blend of ideals, practices, and behaviors is referred to as Dharma (Religion, Virtue, or Duty)
in these ancient traditions.

Religious values are deeply interwoven within Indian culture. The perspective our ancestors
had towards life, their refined analysis, and their categorization of duties all reflect their
treasured spiritual values. Their political and social realities extended beyond narrow
geographical limitations. Their approach to life was marked by a broad perspective and a
duty intertwined with devotion to humanity's ultimate good. Their civilization's single
objective became the multi-faceted development of all humanity.

The ancient Indian political system, rejecting violence, discord, and self-promotion, was
grounded in principles of love, respectful conduct, and virtuous behavior. Life had a distinct
purpose and a supreme ideal, the pursuit of which was considered to surpass all material
accomplishments. This lofty ideal also underpinned the educational growth in ancient India.

Understanding ancient Indian education requires recognizing it as a product of the Indian

theory of knowledge, situated within a corresponding life and values framework. This model
fully acknowledges the reality that life encompasses death, together forming the complete
truth. It provides a unique perspective and balance, allowing for a clear distinction and strict
differentiation between the material and moral, physical and spiritual, transient and lasting
aspects of life. Among all global communities, Hindus are profoundly influenced and shaped
by the concept of death as life's central element. Consequently, an individual's ultimate
responsibility is to realize their expansion into the Absolute, their self-actualization since they
are a latent deity, a fragment of the Divine. Education should thus support this self-
realization, rather than merely facilitate the accumulation of objective knowledge.

The Fundamentals:

The ultimate goal of education was defined as Chitti-Vritti nirodha (the regulation of mental
activities associated with the tangible world). However, the educational system also fostered
the pupil's abilities for their comprehensive development.
1. Knowledge pertaining to life:

In ancient India, students would isolate themselves from worldly distractions and, in serene
natural settings, would learn from their teacher’s complex life matters through attentive
listening and meditation. Their education wasn't limited to textbook knowledge but also
included a practical understanding of the world, and society gained through direct interaction
with people. Efforts were made to enable students to personally experience the Supreme truth
and shape society accordingly.

2. Intimate teacher-student relationship leading to holistic development:

The tradition of students living in their teachers' homes and serving them was a unique
practice in ancient India. Through such close interaction with their teachers, students would
naturally emulate their qualities. This was considered essential for the complete development
of their personalities as the teacher embodied the values, traditions, and behavioral norms of
the society from which the student originated.

3. Progress in social work:

Another notable feature of the ancient Indian education system was its practical application to
life. The students’ stay at their teacher's home allowed them to develop social skills, as it was
their sacred responsibility to gather firewood, provide water, and perform other household
chores for their teacher. In doing so, they would not only receive lessons in domestic life but
also understand the importance of hard work and serving the community.

4. Professional Training:

In ancient India, students received hands-on training in professions such as animal husbandry,
agriculture, and dairy farming, primarily by caring for their teacher's cattle and assisting them
in various ways. Clearly, ancient Indian education was not strictly theoretical but closely tied
to the practicalities of life. The modern Western principle of "Learning by Doing" was
inherently central to education in ancient India. Life served as a testing ground for
educational exploration, cultivating many admirable traditions. Likewise, students asking for
alms for their own sustenance and to serve their Guru cultivated values of compassion and
humanity in them.

The Four Vedas:

The Vedas, considered the world's oldest literary works, are the foundational sources of life
philosophy in ancient India. Delving into these Vedas not only allows one to thoroughly
understand the philosophy of life, but also to comprehend the entire structure of ancient
Indian culture. As a result, all of India's literature and philosophy, including the Upanishads,
the Smritis, and the Puranas, universally recognize the supremacy of the Vedas.
1. The Rig Veda:

The Rig Veda is acknowledged not only as the earliest Hindu text but also as the oldest work
of all Indo-European languages and humanity. It serves as the groundwork upon which the
edifice of Hindu Civilization has been continuously built over centuries, largely characterized
by a lifestyle of simplicity and high intellectual pursuit. Certain prayers from the Rig Veda,
such as the well-known Gayatri Mantra, also present in the Samaveda and Yajur Veda, reach
the zenith of knowledge and continue to nurture human spirits to this day. The Rig Veda
itself showcases an evolution, and the history of the Rigveda encapsulates the cultural
narrative of that era.

After the Rigveda, the three Samhitas - Sama, Yajuh, and Atharva - came into being in quick
succession, introducing a new type of literature. The sequence of hymns in the Rigveda does
not align with that of the sacrifices, to the point where some hymns do not relate to the Yajna,
or sacrifice, at all. In contrast, in the Sama, Yajuh, and Atharva, the hymns are closely
aligned with the order of sacrifices. Priesthood was becoming increasingly influential, and
later higher education became tied to the priesthood and the ceremonial elements of religion.
The education syllabus was the same for all students, known as Brahmacharinis; they were all
expected to excel in the melodious verses and the ceremonial elements of the Yajna. Over
time, the necessity for labor division became apparent due to the increasing complexity of the
formal aspect of sacrifice, as it was unrealistic to expect a single priest to specialize in the
three-fold aspect of the Yajna.

2. The Sama Veda:

The collection of all the hymns recited during the Soma Yajna ceremony is recognized as the
Sama Veda.

3. The Yajur Veda:

The Yajurveda consists of a collection of prose mantras. Although the responsibility of hymn
chanting during the sacrifices predominantly fell to the Hotri, the primary order of
priesthood, some hymns linked to prayer or invocation were sung by the Adhvaryus, who
were intricately involved with sacrificial procedures. As a result, a distinct educational
institution was founded to instruct these priests. The origins of India's elementary prose
literature, which eventually gave rise to the Upanishads, can be found in the Yajurveda. The
Yajurveda offers insights into both the religious and secular facets of life in India.

4. The Atharva Veda:

Initially, only three Vedas were widely known. Over time, the fourth Veda, known as the
Atharvaveda, also gained recognition. Its content is more unique; unlike the previous Vedas,
most of the Mantras in this Veda are not derived from the Rigveda. The Atharvaveda is
entirely secular, featuring detailed depictions of diverse arts and sciences.

Educational institutions
Gurukul : Gurukul was the hometown of teachers where students come after completing
their initiation ceremony and learn until the completion of their study. The parishads or
academies were the places of higher learning and education where students learn through
discussions and debates. Goshti or conferences were the places where the kings of the states
used to invite scholars from every institute to meet and exchange their views. Ashramas or
hermitages were the other learning centers where students from various parts of the country
used to come and learn from saints and sages. Viharas were the educational institutions
founded by Buddhists where the students were taught the subjects related to Buddhism and
philosophy.

Takshashila or Taxila: Takshashila was the famous center of learning, including religion
and teaching of Buddhism in ancient times. It was famous for his higher education learning
comprising of subjects like ancient scriptures, law, medicine, sociology, astronomy, military
science, and 18 silpas, etc. The well-known scholars from the university were great
grammarian Panini, he was an expert in his subject of grammar and published his work on
Ashtadhyayi, Chanakya who is skilled in statecraft both studied here. Students from Kashi,
Kosala, Magadha, and also from different countries flocked into the university despite a long
and arduous journey. Takshashila was an ancient Indian city currently situated in north-
western Pakistan was the well-known center of learning and has been declared as an
archeological site and world heritage by the United Nations Educational, Scientific, and
Cultural Organization (UNESCO) in 1980.

Nalanda: When Xuan Zang came to Nalanda it was called Nala, which was the center of
learning in many subjects. The students used to come here from different parts of the country
and the world to study here. Different subjects were taught, including the Vedas, fine arts,
medicine, mathematics, and astronomy. Xuan Zang itself became the student of Yogashastra.
Nalanda which is currently situated in Rajgir, Bihar, India was also declared as a world
heritage site by UNESCO. The other famous institutes around ancient times were Vallabhi,
Vikramshila, Ujjain, and Benaras.
Wealth in ancient India:

In ancient India, wealth was intricately linked to economic principles and their
management, encompassing various aspects that contributed to economic prosperity. Several
key elements defined wealth and its management in ancient Indian economic thought:

a. Agriculture and Land Management:

Agriculture was the backbone of the ancient Indian economy. Efficient land management,
irrigation systems, and agricultural practices were crucial for generating wealth. Treatises
like the Arthashastra emphasized the importance of proper land utilization, irrigation, and
crop management to ensure economic stability.

b. Trade and Commerce:

India had flourishing trade networks both within the subcontinent and internationally. The
strategic location along trade routes facilitated economic exchanges, fostering the growth of
commerce. Texts like the Arthashastra detailed regulations, taxation systems, and trade
practices to facilitate and regulate commerce.

c. Craftsmanship and Industries:

Skilled craftsmanship in textiles, metallurgy, pottery, shipbuilding, and other industries
contributed significantly to wealth generation. Ancient Indian texts highlighted the
importance of fostering and regulating various industries to enhance economic growth.

d. Wealth Measurement and Management:

Ancient Indian texts introduced concepts of wealth measurement and management. The
Arthashastra, for instance, discussed economic principles, taxation, revenue generation, and
fiscal policies for effective wealth management by the state.

e. Monetary System:
While barter was prevalent, ancient India also had a sophisticated monetary system. Coins
made of various metals circulated as a medium of exchange, and their production and
regulation were part of economic policies.

f. State Intervention and Governance:

The state played a crucial role in economic management. Governance models detailed in
texts like the Arthashastra outlined the responsibilities of the ruler in managing the
economy, maintaining law and order, and fostering economic growth.

g. Socioeconomic Welfare:

Wealth management in ancient India extended beyond material gains. Emphasis on social
welfare, equitable distribution of resources, and supporting vulnerable sections of society
was integral to economic policies.
 Ancient Indian economic thought focused on a holistic approach to wealth management,
encompassing agriculture, trade, industries, governance, and societal welfare. The
principles laid down in ancient texts provided a framework for economic management that
aimed not only for individual wealth accumulation but also for the overall prosperity and
well-being of society.

h. Knowledge Economy and Education:

Ancient India emphasized the value of knowledge and education as a form of wealth. The
Gurukul system and institutions like Nalanda and Takshashila were centers of learning
that contributed to the intellectual wealth of the society. Education was considered an
investment that enriched individuals and the community.

i. Ethical and Moral Foundations:

Wealth management in ancient India was guided by ethical and moral principles. Texts
like the Manusmriti and Arthashastra emphasized righteous conduct in economic matters,
highlighting the importance of ethical business practices, fair trade, and honesty in financial
dealings.
j. Resource Utilization and Sustainability:

The management of resources and sustainability was a core aspect of ancient Indian economic
philosophy. Texts and practices advocated for the responsible utilization of natural resources,
preservation of the environment, and the importance of sustainable practices in agriculture,
forestry, and other economic activities.

k. Social Capital and Community Development:

Building social capital and community development were crucial elements of wealth
management. The collective strength of communities, cooperative initiatives, and solidarity
among different groups contributed to overall economic resilience and growth.
Governance and Business in ancient India
In ancient India, governance and business were intricately intertwined, playing vital
roles in shaping the economic landscape. The economic system was influenced by
governance structures, policies, and the prevailing societal norms. Here's an overview of
governance and business in the ancient Indian economy:

Governance:

a. Monarchical Systems and Administration:

Ancient India witnessed various forms of governance, including monarchies and
republics. Kings or rulers played a significant role in administration, policymaking, and
regulation. Texts like the Arthashastra provided guidelines for governance, emphasizing
effective administration, taxation, and economic policies.
b. Role of Councils and Assemblies:
Republics such as the Mahajanapadas had assemblies like the Sabha and Samiti where
decisions were made collectively. These bodies contributed to governance, lawmaking,
and policy formulation.
c. Regulation and Justice:
Governance included regulatory functions such as overseeing trade, resolving disputes,
and ensuring fair practices in markets. The administration ensured the implementation of
laws related to trade, commerce, and economic activities.

Business and Economy:

a. Trade and Commerce:

Ancient India had thriving trade links both within the subcontinent and with other
civilizations. The exchange of goods, including spices, textiles, metals, and precious
stones, was facilitated through land and maritime trade routes.
b. Craftsmanship and Industries:
Skilled craftsmanship was integral to the economy. Various industries such as textiles,
metallurgy, pottery, shipbuilding, and jewelry-making flourished, producing goods that
were in demand both domestically and internationally.
c. Agriculture and Land Management:
Agriculture formed the backbone of the economy. Effective land management,
irrigation systems like tanks and canals, and advancements in agricultural practices were
crucial for sustaining the economy.
d. Barter System and Currency:
While barter was prevalent, there were also forms of currency in circulation. Coins
made of various metals were used as a medium of exchange in trade transactions.
e. Guilds and Economic Associations:
Guilds or associations of merchants and artisans existed, contributing to the regulation
of trades, setting standards, and promoting economic interests.
India in Global Economy
India holds a significant position globally in various aspects related to its economy:
1. Economic Size:
India boasts one of the world's largest economies, consistently ranking among
the top economies globally in terms of GDP. It's a key player in the global
economic landscape, contributing substantially to the world's GDP growth.
2. Market Potential:
With a population exceeding 1.3 billion people, India represents a massive
consumer market. This demographic dividend offers immense potential for
domestic and international businesses, attracting investments across sectors.
3. Emerging Market Status:
India is often identified as an emerging market with immense growth
opportunities. Its economic growth rate, diverse economy, and the presence of
various industries contribute to its attractiveness for investors and businesses
globally.
4. Information Technology Hub:
India is a global leader in the IT and software services sector. The country's
prowess in technology, innovation, and a skilled workforce has positioned it as
a hub for IT services, software development, and digital innovation.
5. Manufacturing and Industry:
The manufacturing sector in India is growing, attracting investments in
industries such as automobile, pharmaceuticals, textiles, and more. The 'Make
in India' initiative aims to boost domestic manufacturing and attract foreign
investment.
6. Global Trade Partner:
India engages extensively in global trade and has bilateral trade agreements
with numerous countries. Its participation in international trade has
strengthened its economic ties globally.
7. Challenges and Reforms:
Despite its economic strengths, India faces challenges like infrastructure gaps,
regulatory complexities, and socio-economic disparities. The government
continues to implement reforms aimed at addressing these challenges and
fostering sustainable economic growth.
8. Services Sector Dominance:
India's services sector, particularly in fields like information technology,
business process outsourcing, and financial services, has a global reputation
for quality and cost-effectiveness. It's a major contributor to India's GDP and
employment, solidifying India's position in global services.
9. Energy and Renewable Potential:
India is emerging as a key player in the renewable energy sector. The country
has made significant strides in solar and wind energy, aiming to achieve
ambitious renewable energy targets. Its commitment to sustainable energy
sources enhances its global standing.
10. Youthful Demographic Advantage:
India's youthful population presents a demographic dividend and a potential
workforce for global businesses. This demographic advantage contributes to
innovation, entrepreneurship, and productivity, making India an attractive
market for international companies.