Q) Discuss Kautilya’s views on theory of state. How it is relevant today?

The Arthashastra is a primeval Indian discourse on statecraft, economic policy

and military strategy. Kautilya's Arthasashtra is magnificent work on ancient
political thought which was undoubtedly composed between 3rd-2nd Century
B.C. In his political and administrative ideas, the focus of attention was the
king. According to his beliefs, for the smooth functioning of administration and
for the welfare of the people, the king had to be acquainted in the four Vedas
and four sciences of government. Kautilya's administrative and judicial structure
was hierarchical in nature. As for impartiality, he emphasised on the principal of
equity and immediacy. As for law and order, he believed that law was an
imperial command enforced by sanctions. Dissimilar many other authors in the
community, Kautilya is exceptional Indian political philosopher who was both
thinker and statesman. He contributed in various social and political revolutions
of his Age. With more and more studies in the field of politics and economics
and with a modern outlook and understanding of world affairs, the significance
and indebtedness of Kautilya's 'arthashastra' is incontrovertible.
Welfare State:
Arthasashtra sets the conceptual groundwork for making India the first welfare
state. He backed welfare in all spheres. He did not talk only about human
welfare but paid attention to animal welfare also. He states that "In the
happiness of his subjects lies the king's happiness, in their welfare lays his
welfare. He shall not consider as good as only that which pleases him but treat
as beneficial to him whatever pleases his subjects" He supported the protection
of livelihood, of weaker section, consumer protection and even the welfare of
prisoners also.
Kautilya is not principally concerned with broad political speculation on the
origin and nature of the state and his originality is not to be found in the
monarchy of abstraction. Of the three ends of human life, virtue, wealth, and
enjoyment, Kautilya allocates first importance to wealth, but he is always aware
of the instrumental value of religion and principled norms in preserving the
structure of society. In Indian theory, independence was usually thought to
cover seven elements:
 - The king
 - The ministers
 - The populace
 - The fort
 - The treasury
 - The army
  - The ally
The theory, in which diplomacy is made an integral part of politics, is intended
to show the necessary conditions for the effective functioning of the state.
Good Governance:
Governance generally incorporates all aspects of the way a country is governed,
including its economic policies and regulatory framework. Arthashastra stated
that good governance comes with peace and order which can be accomplished
through the partnership of different factors in a community. The first of these
factors is the leader. The leader is the one held responsible for everything that is
happening in a community. In Indian society, the leader or the king plays a vital
role as he is the one leading the nation and thus, must display a lot of virtues.
Kautilya had enormous knowledge about different aspects of governance such
as taxation, diplomacy, trade, business, administration etc. It is supposed that he
also had a good knowledge of medicine and astrology as well. It is a discourse
on political economy alike to Machiavelli's, The Prince and hence he has been
compared to Machiavelli by some and Aristotle and Plato by others. Kautilya
explained the way a state's economy is organized, how ministers should be
selected, war conducted, and how taxation should be organized and distributed.
He put more emphasis on the importance of a network of detectives and
informers which function as an investigation corps for the king, focusing on
external threats and internal dissidence.
He followed a general approach to governance and enlightened several areas
critical to the operation of a country in depth. The main sections deal with
National security and Foreign Policy, Administration of Justice, Strategies
related to economic development, Taxation, Labour Management, and Financial
Management. Key element in effective governance is the existence and
accomplishments of projects that will enhance the nation. In the Arthashastra,
Kautilya offered concrete proposals that must be implemented appropriately.
The most important of these is the prioritization of education. 
The Arthshastra linked political governance with economic governance. The
end is economic governance while political governance is the means. But as
economic objectives are not understood in the absence of political ones, then
political governance becomes an end and economic governance the means.
'The end justifies the means', this is supposed to be the basis of Kautilyan
beliefs. Political power and material wealth are the means and ends of
governance. And good governance - political or economic - depends upon
justifying the ends and means as the socio, economic and political
circumstances.
Kautilya on Law and Justice:
Kautilya upheld that it is indispensable duty of government to maintain order.
He describes 'order' broadly to include both social as well as order in the
sense of thwarting and punishing criminal activity. Arthashastra incorporate
both the civil law and criminal law. Kautilya attributed a lot of importance to
'dharma'. According to him, 'the ultimate source of all law is dharma'. He
enticed in the name of 'dharma' to the sense of honour and duty and to human
dignity, to moral responsibility and to enlightened loyalty.
Kautilya did not interpret law to be a manifestation of the free will of the
people. Thus sovereignty, the authority to make laws, did not vest with
inhabitants. Laws were derived from four sources, dharma (scared law),
vyavhara (evidence), charita (history and custom), and rajasasana (edicts of the
King). Kautilya recommended that any matter of dispute shall be judged
according to four bases of justice. These in order of increasing importance are:
- 'Dharma', which is based on truth
- 'Evidence', which is based on witnesses
- 'Custom', i.e. tradition accepted by the people
- 'Royal Edicts', i.e. law as promulgated.
Arthashastra sketches a system of civil, criminal, and business law.

Relevance of Arthsashtra in modern time:

Kautilya established an extremely vital imperative on subjects like: governance,
polity, politics, and progress have to be linked to the welfare of the people.
When assessing the some economic ideas of kautilya, it can be understood
that even the terminology employed in Arthsashtra may have changed but the
nature and role of state in the economic system seem persistent in all settings.
His philosophies remain prevalent today in India.
He offered cherished basis for economic science. It comprises of very useful
economic ideas on foreign trade, taxation, public expenditure, agriculture and
industry. Good governance and stability are inseparably linked. He
recommended that heavy taxation should be avoided. If tax rates are high,
public will not be willing to pay the tax and discover the ways of tax evasion.
Low rate of taxation will produce more revenue to the state.
He was well mindful that terms of trade were not just depending on economics
but also on various factors. There is no autonomous mechanism that will
ensure that a nation would benefit from trade in the absence of certain
precautions and policy measures. Social welfare is the main focal point of
kautilya’s economic notions. The State was required to help the poor and
helpless and to be proactive in contributing to the welfare of its citizens.
Kautilya gave more emphasis to human capital formation that is relevant in
current times because development is not possible without human capital
growth. Besides these ideas, there are a number of things in Arthasashtra
which is very significant such as conservation of natural resources.
Arthasashtra provides much basic knowledge about economics, and several of
his ideas are still important in today's economic system.

To summarize, The Arthashastra provides broad coverage on the overall

economy, which includes: infrastructure (roadwork, irrigation, forestry, and
fortification), weights and measurements, labour and employment, commerce
and trade, commodities and agriculture, land use and property laws, money
and coinage, interest rates and loan markets, tariffs and taxes, and
government expenditures and the treasure.
Especially, Arthashastra is a discourse on political economy interpreted in its
broadest sense.