ARTHASHASTRA’S FISCAL POLICIES AND THEIR APPLICATION IN COMTEMPORARY PUBLIC FINANCE MANAGEMENT

Mr. Swapnil M. Gacche
Assistant Professor Vedanta College, Vitthalwadi.

Abstract :The Arthashastra, authored by Kautilya in the 4th century BCE, presents one of the earliest systematic frameworks of fiscal governance and statecraft. Central to Kautilya’s economic philosophy is the assertion that financial stability forms the foundation of political power and social order. His fiscal architecture was built upon diversified taxation, prudent expenditure management, rigorous auditing, and ethical accountability. Concepts such as the “honeybee principle” of taxation, elastic tax structures, and maintenance of emergency reserves demonstrate a sophisticated understanding of revenue optimization without burdening citizens. Unlike purely moralistic treatises, the Arthashastra offers a pragmatic and administrative blueprint for maintaining a strong treasury (Kosha) while promoting public welfare (Yogakshema). This study adopts a qualitative interpretivist approach with a descriptive and comparative research design to examine the relevance of Kautilyan fiscal strategies within contemporary Public Finance Management (PFM). Through cross-temporal analysis, it identifies striking parallels between ancient fiscal prudence and modern mechanisms such as progressive taxation, Fiscal Responsibility Acts, contingency funds, and anti-corruption audits. The findings suggest that Kautilya’s emphasis on transparency, administrative rotation, and three-tier verification systems anticipates modern accountability standards. The research concludes that Arthashastra’s fiscal wisdom is not merely historical but offers adaptable principles capable of enhancing efficiency, transparency, and ethical governance in contemporary financial administration.

Keywords: Arthashastra, Kautilya, Public Finance Management, Fiscal Policy, Taxation, Yogakshema, Fiscal Transparency, Anti-Corruption, Fiscal Prudence