5 Marks Each

Question 15 Marks

Describe the objectives suggested by Pandit Deendayal for Indian economy.

Answer

Introduction :

Pandit Dindayal opined that the objective of economic system should not be the development of certain class of people, but it should focus on the overall development of all the people living in the country.
Pandit Deendayal Upadhyaya suggested the third option against capitalism and socialism is 'an integral economic policy' which is based on 'integral humanism'.
His thoughts are influenced by Gandhiji's thoughts.
Gandhiji also suggested the ultimate objective of economic system should be the welfare of the people living in the innermost area of the country.
The pre context of Pandit dinadayal's thoughts is also interesting.
India accepted the way of planning since $1951.$
The base of India's economic policy was industrialization and focus on public sectors.
In second five year planning, the development of basic industries was focused on the cost of private sector, agriculture and small industries.
This had serious adverse effect on economy.
Various problems like inflation, unemployment, inequality of income, urbanization etc. evolved.
This strategy ignored the livelihood of the people innermost part of the country.
So poverty increased.
So to overcome this situation Pandit Deendayal Upadhyaya suggested the third option of 'an integral economic policy' which is based on 'integral humanism'.

Economic objective suggested by Pandit Deendayal

Uplifment of humans and happiness:

According to Pandit deendayal, capitalist and socialist economy failed to understand common man.
He suggested that man should not be considered only economically but all the aspects of man's life should be thought and accordingly economic arrangements should be made.
He suggested to adopt good thing from western culture's achievements, considering our country's conditions, but it should not be blindly followed.
Capitalism and Socialism have failed in comprehending human beings and their problems; hence according to Pandit Deendayal, India needs neither capitalism nor socialism but India needs 'progress and happiness of her people'.
In this regard, he stated the following objectives which Indian economy should pursue:

- - - A minimum standard of living must be ensured to all.
    - That means the economic arrangements should be made in such a way that even the person living in the innermost area of the country should also receive basic necessities like food, clothes and shelter.
    - The second most important goal should be to increase Security and affordability of the
    - Gradual progress should be made in such a way that such new methods are devised that nation. help India to contribute in development of the world in her own manner.
    - In order to attain goal, determined by economy, all young and able people should get the deendayal, the main aim of the human should be to earn wealth for happiness and human resources are the medium for that.
    - A country cannot progress if it opportunity to work.
    - Natural resources must be used economically so that scarcity of the sources does not arise in future.
    - Production process must be adopted and devised keeping into consideration the availability of factors of production.
    - The western production policies should not be followed blindly.
    - Considering the scarcity of capital and availability of labour he stressed on labour intensive production methods instead of capital intensive methods and developing small scale industries and homemade industries in place of large scale industries.
    - Instead of focusing on economic development, integral economic policy should be constructed based on integral humanism.
    - Considering the social and cultural aspects of human life, overall and all round development of the man should be the main objective of our economic and financial policies.
    - There should be the ownership of state and joint sectors, private sector & public sector in various industries and its decision should be taken in practical way keeping in mind the time and conditions.

Wisdom of attainability and factors to attain attainability :

Before independence, we used to look at every problem from national angle and now we see from economic point of view and problem arises out of it.
The people living in any part of the country should receive the fruit of development and should prosper, this should be the ultimate goal.
The main aim of economic policy.
should be to make optimum use of available resources and to use resource feasibility Wisely, fie believed the social restrictions and law should be implemented in such a manner that scarcity of wealth and influence of wealth should not be the reason for human collapse.

Decentralized Economy :

Pandit Deendayal suggested a decentralized economic set up which promotes overall development and increases interaction among people.

Conclusion :

A part from above mentioned objectives, Pandit Deendayal Upadhyay also contributed by way of his ideas for development agriculture, small and home industry, distribution of product marketing and rural economics.
The new economic policy which came into existence since 1991 also emphasized liberalization, privatization and globalization which resulted in problems like unemployment, inflation, poverty, environmental imbalance etc.
In this context, after considering rural development, India should use decentralized economy to the maximum extent.
The use of advance capital intensive technology should be limited for the production of international market good s only and small industries based on labour intensive technology should be encouraged for the production of domestic necessity item s.
To reduce the burden of dependence on agriculture, small industries, which use simple machines for production, should be expanded.
This can solve the problem of urbanization and environmental imbalance.
The world is having huge loss because of excessive use of natural resources.
Many countries of world are passing through economic crisis. So, various policies are being implemented in India.
$MANREGA'$ is the main policy.
More funds have been allocated for this village oriented policy by our finance minister Arun Jaitley in this year's budget.
'Gram Jyoti Yojana' was implemented for the development of agro and rural industries.
Based on his theory of importance of labour and employment to everyone; 'Shramave Jayate' plan was introduced in India on $16th$ October $2014.$
All these efforts could not succeed in a desired manner owing to the Indian politics and the inefficiency of administration as well as corruption.

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Question 25 Marks

Explain the Theory of Trusteeship given by Gandhiji.

Answer

Introduction :

Gandhiji gave the trine of trusteeship. He gave this principle getting inspired by the Bhagwad Gita and the Ishopanishd.
In Capitalist Economy, there is a centralization of economic power and it creates imbalance. In socialism, stateis whole and soul, it harms administrators. To remove problems of both economies, Gandhiji presented doctrine of trusteeship. Gandhiji was not against keeping the private property.
So he gave the doctrine of trusteeship which governs the use of private property.

Meaning of trusteeship :

'Ownership' & "Trustee' have different meaning. Those resources which are used for own use is called owned goods.
And the one, who uses the things by taking into considerations society at large, is known trustee. According to Gandhiji everyone should behave as trustee instead of owner.
This principle is simple.If a person has inherited and accumulated large number of wealth she or he should form a trust of excess wealth.
A person requires only as much wealth as is necessary for a dignified living. Wealth is than that belongs to the society.
The owners of wealthy and capitalists can voluntarily act as trustees of their wealth.
They will be allowed to retain the stewadship of their possessions and which to increase the wealth, not for their own sake but for the sake of the nation without to use their talent , exploitation.

Main points of Doctrine of Trusteeship :

Change of heart of rich people is possible:

Gandhiji was a worshipper of truth and non-violence.
His principle of trusteeship was based on this.
Gandhiji insisted capitalist to become trustee instead of owner.
He believed that the rich should use their wealth and property for the benefit of society because the real owner of wealth is society.

Duty instead of Right :

Gandhiji opined that a rich should feel the responsibility of using the excess wealth for benefits of the society rather than just asserting their right over wealth.

Awareness. Referendum and social change :

According to Gandhiji, the principle of trusteeship cannot be implemented by law but it can be followed by love and understanding.
For this he showed the way of referendum and social change.
He believed that law includes force and compulsion so it cannot change the heart of people.

Importance of the interest of the whole society :

It was better that a large number of people are benefited instead of few individuals.
Gandhiji advocated trusteeship in whole social and economic transactions.
If this principle is accepted than struggle between workers and owners can be stopped.
Workers would consider their masters as well wishers and masters would not exploit their workers.

Compensation to the Trustee :

Gandhiji believed that the state should have provision to compensate the trustees for their service.

Opposition to Nationalization :

Gandhiji opposed the idea of nationalization of resources for production and the abolition of private property rights for bringing out economic equality.
Such nationalization would decrease the morals and ethics of people and turn them against the state.
Gandhiji opined that he would allow rich capitalists and landlords to retain the ownership of their possessions but would convince them to become trustees and use their wealth for good of the society

Appointing the Successor :

According to Gandhiji the legal owner of the wealth should be the official trustees and this right should not be given to society of state. The owner of the wealth would P appoint a trustee who would work as trustee for the benefit of society after the death of real owner. P According to Gandhiji new successor should be appointed by law or state, the state or society can't seize the property of the trust. Gandhiji suggested that though the owner of the wealth can name the successor to the trust, the state must monitor the functioning of the trust.

State Control :

When the capitalist do not succeed as a trustee in present then Gandhiji advised the state under certain cases to use private wealth with minimum force or violence.
This can be done after evaluating the ways in which wealth was accumulated.
The state can take control of same types of private property after providing adequate compensation to the owner. It should also be noted that Gandhiji did not advice to forfeit whole property.

Devotion towards God :

Gandhiji has total dedication towards God.
He believed that whatever a person Carn is because of God only.
So a rich person should enjoy only that much wealth as much wealth as per the usege of common person, for the rest of the wealth he should act as a trustee only.

Favour of Private Administration:

Gandhiji was not against private administration as well as socialism.
He believed that the proportion of malpractice is less in private administration.
He was in favour of increasing trusteeship in private ownership.

Best Option :

Gandhiji's economic ideology has three option:
- Private sector.
- Public Sector.
- Trusteeship.
Owing to certain limitations of private and public sector, he advocated trusteeship doctrine. Because of trusteeship , private properties can be utilized in a controlled manner, and still state can be saved from the vices of administrate ship.
Gandhiji gave the principle of trusteeship to stop the exploitation done by certain group of people on large scale.
If this attempt fails then only nationalization was suggested as the last option.

Important points of Trusteeship :

The following are the important points of doctrine of trusteeship presented by Gandhiji
- To convert capitalist society into socialist society.
- To give right of the assets for welfare of society
- To fix the maximum limit of income
- To fix minimum wage, for livelihood.
- To produce as per the need of the society.

Conclusion :

If Gandhijl's doctrine of trusteeship is properly selected then unpleasantness among various section of the society can be reduced.
Gandhiji's thoughts are humanistic and for the welfare of people at large.
In it more importance is given to love, understanding and nonviolence in place of compulsion and violence.
There is no other way to achieve cultural dominance and human life full of love and cooperation except accepting this principle.

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Question 35 Marks

Explain Gandhiji’s thoughts related to use of machinery.

Answer

Gandhiji’s thoughts related to use of machinery:

According to Gandhiji the ‘Era of Machines’ was called so because machines dominated the production during that era.
Some critics considered him as a person who opposes machines however, he was not against the machines but against inappropriate use of machines.
He was against the thoughtless use of machines which replaced human labour and made labourers unemployed.

Gandhiji’s views regarding use of machines:
$(A)$ Gandhiji recommended that such basic and simple machines should be used which could be owned and used by poor producers.
$(B)$ According to him, those machines which facilitate the work of labour must be employed but those which replace labour and make labourers unemployed should not be used widely.
$(C)$ Gandhiji did not oppose machines which were used for welfare of the poor.
$(D)$ Machinery which reduce physical labour and saves time and funds should be widely employed. But at the same time he asked the society to beware against the use of machines which enhanced profits of a single individual or few individuals. As per him machines must be used for benefitting the society as a whole.
$(E)$ He was against the use of machines which led to concentration of economic / power in the hands of a few people. He believed such machines become a means of exploitation of the poor by a few profit motivated rich people.
He asserted that machines are for human beings and human beings are not for machines and hence machines must not be used so widely that human beings become highly dependent on machines.

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Question 45 Marks

Explain Kautilya's thoughts on Agriculture and Animal Husbandry.

Answer

Introduction :

According to Kautilya, the progress of any country's economic prosperity depends on the development of animal husbandry and industry.
Animal husbandry and agriculture is the main source of income of a large community.
Its development give them income and livelihood both.
In the same manner state should focus more on development of industry for increasing prosperity.
Kautilya expresses his views about agriculture, animal husbandry and industry as under.

Kautilya's thoughts about Agriculture-Animal Husbandry :

Kautilya named agriculture as the primary means of livelihood. He classified land in two types :

land under state ownership and,
Land under ownership of private individuals.

He further suggested that the state owned land should be tilled by people who were otherwise made slaves by the society, prisoners and the other agriculture labourers.
And total income derived from such land was kept by state.
While the land under private ownership, was given to farmers or landlords.
Out of this land's produce, certain portion was to be given to state.
Normally, half or $1/3rd$ portion was to be given to the state.
In ancient times only merchants (Vaisyat) farmer and servants (Shudras) were allowed to do farming and Brahmans (Hindu Priests) were not allowed to do farming.
It was Kautilya who gave them (Brahmans) the consent to do farming.
But at the same time he suggested that the Brahman himself would not use plough.
Kautilya believed that to increase prosperity the whole land should be used for agriculture.
He believed that land should be used mainly for agricultural purpose and hence the uncultivable land should be converted into cultivable.
Because by farming, farmers get their livelihood and state gets revenue, so on one hand welfare of the state happens and on the other hand the becomes prosperous.
He suggested of constructing reservoirs for agriculture.
He also suggest, various methods which can be used for higher productivity.
Animal husbandry is also related to agriculture; therefore Kautilya has also included it as a means of livelihood and has suggested means for its development.
In this regard he mentioned three categories of animals as $(1)$ trained/pet animals $(2)$ dairy animals $(3)$ wild animals.
Kautilya has $40$ suggested rules and penalties related to animal husbandry.

Kautilya's thoughts about Industries :

Kautilya believed that only a resourceful state, proper and develop and hence he gave directors for setting up industries.
According to him, a king should expand the possibilities of new mines and thus order excavation, develop art and craft industry to use skills and promote skill formation, promote transport and communication as also create infrastructure for industrial development.
He further suggested setting up of proper markets in towns/cities to facilitate the sale of the produces wares.
He emphasized on developing warehouse: and dharmshalas (Indian religious rest houses) and cities so that the finished product of industries get a market.
Kautilya also suggested that the government itself should produce some products and make arrangements for sales through government department.

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Question 55 Marks

Explain Kautilya's thoughts on State treasury and taxation policy.

Answer

Introduction

The original name of Kautilya was Vishnugupta.
Around third century, he accompanied Chandragupta Maurya in establishing a country with strong and prosperous economy based on morality, to end the tyrant rule of last king of Nanda dynasty "King Uhananand".
He was prime minister & was an expert politician.
He gave guidance on various subjects like Politics, law, economics, expert administration, social order, agriculture, industry, state treasury & taxation policy.
According to him, a state should have sufficient treasure for its prosperity, stability, unity and management.
So every state should keep on putting efforts to increase its treasure. A state can easily perform its economic responsibilities if it has sufficient treasure.
It can prepare proper structure for the development of trade and commerce.
Various services like roads, communication, transportation etc. get pace directly or indirectly.
Kautilya's presented thoughts can be very useful for the rules in his policy of state treasure and taxation.

Kautilya's thoughts about State Treasure :

Kautilya kept state treasure on the top in the list of the ways which he suggested for the prosperity of the state.
All the work of the state are dependent on state treasure so he advised all the kings to keep increasing their state treasure.
A state which has enough state treasure can spend proper money for its defense, so it creates greater influence on other state and their by making the state strong and impressive.
Stability can be maintained if a state has proper state treasure.
State treasure helps the state in natural calamities like draught, floods , cyclone etc..
In India many kings opened the gates of their state treasures in such natural calamities.
When a king accepts such kind of responsibilities, it helps in strengthening the bonding between the king and subjects.
State treasure is important to make a state prosperous economically.
Kautilya also suggested to use the state treasure for developing trade, agriculture, industry, transportation and communication system.
He suggested to construct warehouses and dharamshalas $($guesthouses$)$ for facilitating traders.
At that time free trade policy was implemented on large scale.
Inspite of this, tax was imposed on imported goods.
Kautilya also suggested that the government itself should produce some products and make arrangements for sales through government department.
Sufficient state treasure was required by the state so that the king can take the responsibility of social welfare $($Social security$)$.
Every person was protected against starvation.
The main aim of state administration was to distribute funds and food.
Kautilya wished to have complete rule of state over its subjects but his aim was of social welfare.
According to him it was the responsibility of the state to establish religious institutions for the poor and encourages jobs for unemployed persons.
It was the duty of the state to protect poor and weak people. In short, Kautilya was in favour of such a state which was based on social security.
This concept is useful even today for better management.
So it can be concluded that the use administratative expense is required for performing various responsibilities.
Every king should try to gather state treasure in ethical manner.
Kautilya has shown $7$ sources of income for the state, which include :

Towns,
Villages,
Irrigation,
Mines,
Jungle,
Animal husbandry,
Trade and commerce.

He suggested ways to collect state treasure like:

He has emphasized that the king should collect taxes once in a year.
He should not use forceful means to increase the treasury.
It is also advised to refrain from harshness while collecting taxes from regions facing famine and drought.
Kautilya also specified the rates of taxes $($amount of taxes$)$ for various categories of workers.
For example, one fourth of the agricultural production may be collected as tax from individual farmers; one half of the production nay be collected as tax from individual manufacturers of cotton, wool, silk, wax and medicines.
This ray he suggested taxes for other occupations also.
He also suggested on the use of public property, promotion of trade, gifts, penalties, fines and rewards etc.

Kautilya's thoughts about Taxation Policy :

He considered tax as the main source of one of state and in budget, he suggested of taking loan for deficit financing.
He suggested that the den of tax should be implemented in such a way the it should not weaken the condition of tax payers and state also did not suffer loss.
The rich people give more tax so they should be placed higher in society.
Kautilya gave clear principles of taxation which indicate the type of short term and long term tax policies which a state should have; the limits of tax rates which a king may impose and so on. provisions for increasing tax rates during emergencies are also presented.
He laid down such principles of taxation which make the taxation taxes in simple, less expensive and less complex.
In this context, he suggested the following types of a n the tax structure

Land tax :
- In ancient time, the king had the rights to collect certain part of agriculture product as tax from farmer or landlord.
- This is main source of income of government.
- He suggested various measurement scale and standards to collect land tax.
- Keeping in mind the type of land, its productivity, form of product, mode and availability of irrigation, Kautilya had devised rules to decide the proportion of taxes.
- He also proposed tax exemptions as an incentive to increase productivity.
Import —Export Taxes :
- Import-export taxes are classified by Kautilya as:

- - - External charges $($taxes$)$ :
      - The tax imposed on the material produced in the country is called external tax.
      - At that time the big rulers used to defeat small rulers and would conquer their territory.
      - This was called the state of the king.
    - Internal charges $($taxes$)$ :
      - For the material produced in the state or the capital.
    - 'Aatlthya' charges $($taxes$)$ :
      - For the material imported from foreign regions or states.

State had large income of Octroi so suggestions were given for erecting Octroi booths also.
At that time road and property tax were also collected so Kautilya suggested rules for them also.
Kautilya suggested principles of collecting taxes based on the type, shape and importance of product.
He opposed tax evasion and undisclosed properties.

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Question 65 Marks

Explain Economic thoughts of Gandhiji in detail.

Answer

Introduction

Gandhiji believed that neither capitalist nor socialist economic approach would be able to solve the economic problems of India.
he did not intend to create any economic method is in words, "There is nothing like Gandhiji's and I do not want to leave behind any religion I do not claim that I have discovered any new theory of ideology I simply tried to apply the eternal truths as solutions to life's routine problems.
" According to him to thought of economic policy should not be separated from social and ethical problems.
Gandhiji believed that the ways to attain economic prosperity should be pure and non- violent.
He believed neither capitalist nor socialist economic approach would be able to solve the economic problems of India.
So he gave alternative economic ideas against western capitalist production policies, excessive use of machinery and materialist philosophy.

Gandhiji's Main Economic Thoughts :

Sarvodaya :

Gandhiji's idea of 'Sarvodaya' was an inspiration from British writer John Ruskin's book 'Unto the last.' From that book he derived, the importance of labour work and ways to eradicate poverty from India.
Gandhiji envisioned a society devoid of violence in which the helpless, poor and needy are uplifted to a state of wellbeing; and this idea of social development was called 'Sarvodaya' which means, 'upliftment of all'.
According to the 'Bhagwad Geeta', in all human beings dwells the same soul and adopting this thought Gandhiji based the principle to 'Sarvodaya' on mutual cooperation and love.
He further suggested that 'Sarvodaya' type of socialism may be attained by forsaking desires which lead to greed.
For successful implementation of 'Sarvodaya', he presented the ideas of renunciation, service, reducing dependence on machinery, protection of labour, decentralization of power and prevention of exploitation.
He disliked the thought that very few people became rich due to the machinery and industry.
For him socialism means that there are no differences between people, and all that all equal.
According to him the dual policy of personal & social values is the main reason ,41 id or inequalities.
So the main aim of Sarvodaya is to convert individual excellence into social values.
Gandhi insisted on purity of resources for Sarvodaya.
He believed that the main reason of all social problems is the difference between rich & poor, owner & servant, king & its subjects.
The main principles of Gandhi's Sarvodaya were: a
- To satisfy basic needs of people.
- To have sufficient Income so that people's work efficiency can be maintained.
- To give freedom for Individual development.
- To take care of the simplest people of the society and to take proper steps for their upliftment.
According to Gandhiji in socialism there should be no differences and discrimination between rich & poor, master & servant, king & its subjects.

Importance of Labour :

Gandhiji promoted the idea of equitable remuneration for different types of labour.
Labour is only the living factor of production.
So anyone who labours is entitled to live a dignified life and there should be enough opportunities for all to work.
He believed that it was obligatory upon the state to create employment opportunities.
Stating the importance of labour Gandhiji empasized that though mental/intellectual labour was important for development, everybody should engage in some form of physical labour.
Gandhiji observed a decline in dignity dedicated physical efforts make a person give up greed and enable the person to get employment and thus get freedom from Poverty.
So Gandhi gave an idea of using 'Ratio'. Gandhiji advised to accept the importance of labour so that it can regain its reputation an importance.
Poverty and Unemployment can be eliminated by accepting the importance of Labour.

Use of Machinery :

According to Gandhiji the era of machines was called as machines dominated the production methods.
Some critics called him an opponent of machine but he was never against proper use of machines.
He was against the careless use of machines which replaced human labour and rendered labourers unemployed.
The following points brief his views regarding use of machines.
Gandhiji recommended maximum use of basic and simple machines that can be owned by and useful to poor producers.
Gandhiji always suggested those machines which did not mean for living in slums and thereby increasing their efficiency.
Gandhiji opposed such machines which increase production but a result of its many workers gets replaced by machines and thereby making those unemployed.
He believed that the benefit of saving in time, labour and capital should be given to society at large and not to a particular person only.
Gandhiji was against the use of machines which led to concentration of economic power in the hands of a few people and became a means of exploitation of the poor by a few profit motivated rich people.
Gandhiji emphasized that machines are for human beings and human beings are not for machines and hence machines must not be used so widely that human beings become highly dependent on machines.
Gandhiji did not oppose machines which are used for welfare of the poor.
- In short, Gandhiji opposed machines because of following three reasons :

- - - Machines make a person slave.
    - Excessive use of machines leads to unemployment and
    - Use of machines leads to centralization of Economic power. Excess mechanization breaks villages & leads to urbanization.

Decentralized Economy :

Gandhiji advocated the decentralized economic system for India.
He wanted economic power to be distributed among many Indians and not among a few people only.
According to him, development of villages should the central concern of any process economic development and he wanted villages to get equal benefits of development which can happe7,Zi; through decentralized planning.
He emphasized on small scale and household industry for decentralized economy and also accepted the importance of voluntary organization.
He also favored the interference of state for eradicating exploitation done by masters.
He gave the idea of decentralized economic planning as an alternative to capitalist planning as a solution to the problems of centralized economies and thus he promoted the idea of increasing the use of 'khadi' and the idea of spinning khadi as a household industry (with the help of spinning wheel or charkha.)
The concept of decentralized economic planning was rooted in the idea of 'Gram Swaraj' (village empowerment or village self - reliance).

Simplicity and Non - Possession :

The Western Economists breed emphasise on endless needs while Gandhiji followed the principle of 'Simple Living & High Thinking.
Human mind is restless.
The problems of economic life arise owning to greed and race for increasing material possessions by forgetting ethics that is why he circulated the idea of non - possession and consumption for needs and not for greed.
He advised people to restrict their wants and work towards gratification. He stated the following reasons for anxiety in human life:
- Continuously increasing wants.
- Use of complex machines.
- Distribution systems of present times (which create unequal distribution).
By explaining the relationship between wants and welfare, Gandhiji stated that welfare increases when wants are limited.
Real happiness live in simple living.
Production and distribution should be undertaken keeping into consideration the needs of people (to each one according to her or his needs).

Doctrine of Trusteeship :

Trusteeship is one of the important principles given by Gandhiji.
He gave his principle getting inspired by the 'Bhagwad Geeta' and the Ishopanishad'.
The Ishopanishad quotes, "All that is created on the earth is because of God and hence we must relish it after surrendering it".
In Capitalist Economy, there is a centralization of economic power and it creates imbalance.
In socialism, state is whole & soul, it harms administrators.
To remove problems of both economies, Gandhiji presented the doctrine of trusteeship 'Ownership' & 'Trustee' have different meaning.
Those resources which are used for own is called owned goods.
And the one, who uses the things by taking into considerations society at large, is known trustee.
According to Gandhiji everyone should behave as trustee instead of owner.
This principle is simple.
If a person has inherited and accumulated large number of wealth she or he should form a trust of excess wealth.
A person requires only as much wealth as is necessary for a dignified living.
Wealth which is excess than that belongs to the society.
The owners of wealth and capitalists can voluntarily act as trustees of their wealth.
They will be allowed to retain the stewardship of their possessions and to use their talent, to increase the wealth, not for their own sake but for the sake of the nation without exploitation.

Other Thoughts :

Gandhiji was in favour of economical freedom along with political freedom to maintain its democracy.
Gandhiji believed in ethics. He was in favour of self dependence and use of Swadeshi (made in India) products.
He believed in solving problem by non-violence and in ethical way.
Gandhiji's viewpoint was Humanitarian and Spiritual.
He believed that equal distribution of wealth is not possible because of difference in efficiency but everyone should get remuneration as per his worth of work.
The majority of population of India lives in village so 'Gram Swaraj' was very important for upliftment of rural areas and it can be done by establishing small scale industries in villages. He envisioned independent & prosperous villages by developing village industries.

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Question 75 Marks

Discuss the economic thoughts of Kautilya in brief.

Answer

Introduction :

In the pre context of economics In India, many books have presented the economic thoughts, in which economics have deep contact with religion and ethics.
Among all these books "Economics of Kautilya" placed first.
The original name of Kautilya was Vishnugupt.
Around third century, he accompanied Chandragupta Maurya in establishing a country with strong and prosperous economy based on morality, to end the tyrant rule of last king of Nand dynasty "King Dhananand".
He gave his guidance for the important matters like politics, law, economic policy, efficient management, social management, industry, agriculture-animal husbandry, material wealth creation, importance of labour, taxes for increasing state revenue, elements of taxes, penalty, distribution of state expenditure, accounting transactions, purchase-sale, capital wealth ownership right, protection of property, remuneration, wages-salary, interest and debt etc.
He was the chief minister of Chandragupta and was an expert politician.
According to the definition of economics given by him," The profession $($vrutti$)$ of man is business. The residing land of man is business $($arth$)$.
So the science showing the utilities of land's benefit and preservation is known as Economics.
He suggested the ideas of preservation of land and its benefits.
And the final object of showing the ideas of welfare of land.
The economics of Kautilya is, in fact, Ethics.
In Indian philosophy, the principle meaning of religion lies in business $($Wealth$)$ and basis of family lies in liquid $($money$)$.
He expressed his economic views according to the country and time.
He visualized the individual & collective problems of the prevailing and upcoming time and suggested the ways which can make the practical life of whole mankind easy and progress can happen with welfare.
This book was written in its fundamental language on tree barks and leaves.
In $1909\ A.D$ it was presented in proper book form by Pandit Shyam Shastri named as "Kautilya's Economics".
As per his research the book must have been written during $321$ to $300\ B.C.$
"Kautilya's economics" is divided in $15$ parts.
First $5$ parts focuses on internal state administration, next $8$ parts consist of relations with neighboring states and last $2$ parts covers discussions on various subjects.
Economic Thoughts of Kautilya:
Wealth Creation :

He called the land, which provides the livelihood and inhabitant to humans, as wealth.
And he showed the ideas for the benefit and nourishment of land.
He also included labour and forest products in wealth.

Establishment of kingdom $($state$)$ :

At the time of establishing the kingdom $($state$)$ a King should keep in mind the progress of its kingdom and subjects $($people$)$ and accordingly should create facilities.
A state should support in establishing and developing agriculture- animal husbandry and industry, construction of roads for development of mines, market, export- import etc.
He suggested of constructing reservoirs for agriculture and to provide help to the farmers who are in the state of helplessness.

Agriculture and animal husbandry :

In ancient times only merchants $($vaisya$)$, farmers and servants $($shudras$)$ were allowed to do farming and Brahmans $($Hindu Priests$)$ were not allowed to do farming.
It was Kautilya who gave them right $($Brahmans$)$ to do farming.
But at the same time he suggested that the Brahman himself will not use plough. He considered agriculture as the main source of livelihood.
He described land in two types :
- The land acquired by state: In which farming is done by the servants, labourers and prisoners and thereby making optimum use of land.
- The land of personal ownership: In which facilities are given in indirect way to make the land fertile for faming.
- Because by farming, farmers get their livelihood and state gets revenue.
- Kautilya emphasized on developing animal husbandry profession.
- He suggested for well nourished animals, cattle and wild animals.
- He suggested rules and penalties related to animal husbandry.

Industries :

He emphasized on industries for the prosperity of the state.
According to him, it is the duty of the state to dig mines, to increase the factories of handicrafts, to develop the means of communication and transportation for development of industries.
He emphasized on developing warehouses and dharmshalas $($Indian religious rest houses$)$ and cities so that the finished product of industries get a market.
Kautilya also suggested that the government itself should produce some products and make arrangements for sales through government department.

About State treasure :

All the works are depended on money, so Kautilya laid special emphasize on state treasure for the prosperity and safety of the state and he also gave suggestions to increase that.
The prosperity, unity, management, influence of any state depends on its state treasure.
He was in favour of participation of state in the fields like industry, forest conservation,
Agriculture, fishing industry, mining, trade and commerce etc. Normally state treasure is received the form of kind or product form so he laid emphasis on building warehouses.

Tax Policy :

He considered tax as the main source of income of state and in budget, he suggested of taking loan for deficit financing.
He suggested that the burden of tax should be implemented in such a way that it should not weaken the condition of tax payers and state also did not suffer loss.
The rich people give more tax so that should be placed higher in society.
The procedure of tax collection should be economical and easy.
He showed various rules for collecting land tax, import-export tax, house tax, toll tax etc. He presented rules for road tax and wealth tax.

Importance of labour :

Kautilya was against slavery system.
He gave a code of conduct for labours.
He gave basis for fixation of wages for labours.
One can find the idea of minimum livelihood for labours in his book.
He accepted woman employment in production process.

Price regulation :

The work of price regulation was done by finance minister.
His main aim was to protect the people from dishonest traders.
Grains and necessity items were sold by the authorized traders appointed by the government.
Finance minister used to fix the price of the goods in such a way that he gets $5\%$ profit on domestic things and $10\%$ profit on imported goods.
If any trader would sell the goods above this price, than he was punished with penalty.

Social Safety :

At that time, state affairs were governed by the principles.
Every person was protected against drought.
The aim of government administration was to distribute goods and food articles equally among all.
He protested against high rate of interest.
He believed that it was the duty of the state to establish religious institutions for poor people .
so that they get employment and to protect old age and weaker section of the society.

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