RBSE Solutions for Class 11 Economics Chapter 12 Economic Ideas of Kautilya

Rajasthan Board RBSE Class 11 Economics Chapter 12 Economic Ideas of Kautilya

RBSE Class 11 Economics Chapter 12 Text book Questions

RBSE Class 11 Economics Chapter 12 Objective Type Questions

Question 1.
In which branch of knowledge as described by Kautilya were economic matters studied?
(a) Treyi
(b) Varta
(c) Aanveekshiki
(d) Dandaneeti
Answer:
(b) Varta

Question 2.
What has kautilya called the basis of religion?
(a) Wealth
(b) Physical pleasure
(c) Salvation
(d) none of these
Answer:
(a) Wealth

Question 3.
Which assistance has given by the state to motivate able and good farmers?
(a) Irrigation system
(b) Arrangement of good seeds
(c) Grants on loans
(d) Arrangement of good animals
Answer:
(c) Grants on loans

Question 4.
In Kautilya’s administrative system, which of the following officials monitored adulteration, sale of inferior products and weighing less by unscrupulous traders?
(a) Panyadyaksha
(b) Antapala
(c) Pautvadhyaksha
(d) Sansthadhyaksha
Answer:
(d) Sansthadhyaksha

Question 5.
According to Kautilya, what part of cost of imported goods was levied as toll tax?
(a) %.part
(b) 1/5 part
(c) 1/6 part
(d) 1/8 part
Answer:
(b) 1/5 part

Question 6.
Kautilya fixed the profit rate on goods produced in the state as:
(a) 5%
(b) 10%
(c) 15%
(d) 20%
Answer:
(a) 5%

RBSE Class 11 Economics Chapter 12 Very Short Answer Type Questions

Question 1.
Which economic activities has Kautilya included in varta?
Answer:
Kautilya has incorporated financial activities such as agriculture, animal husbandry, industry, and trade in Varta.

Question 2.
Write the names of three types of duty as described by Kautilya?
Answer:
These three departments are- external, intermediate and hospitality.

Question 3.
What is the meaning of savings (Fund) according to Kautilya?
Answer:
According to Kautilya, after calculating the state’s income and expenditure well, the balance that remains is called Savings.

Question 4.
Explain the provisions of pension scheme propounded by Kautilya?
Answer:
According to Kautilya, if an employee dies while working, his salary should be given to his son or wife in the form of pension. At the same time, the expenses of that employee’s elderly and sick family members should be funded financially. Financial assistance should also be given, if there is death, illness or childbirth in his family.

Question 5.
According to Kautilya, what part of the cost of imported goods should be levied as toll tax?
Answer:
According to Kautilya, the state should collect tax of 1/5 part of the cost of imported goods.

Question 6.
According to Kautilya when should grants be given on agriculture?
Answer:
According to Kautilya, to encourage qualified and good farmers, the grants on loan should be given by the King. Simultaneously, farmers should be provided limited financial assistance to prevent health hazards and mortality.

Question 7.
The provision of appointment of which officials has been suggested by Kautilya for prevention of market irregularities?
Answer:
Kautilya made provisions for the appointment of five types of officials for preventing market irregularities-

Panyadhyaksha
Shulkadhyaksha
Sansthadhyaksha
Pautavadhyaksha
Antapala.

RBSE Class 11 Economics Chapter 12 Short Answer Type Questions

Question 1.
In Kautilya’s view, which elements affect the price of goods?
Answer:
According to Kautilya, the price of goods are influenced by the following elements

Society
Wages
Transportation Expenses
Rent

According to Kautilya, the sansthadhyaksha should look at the other elements, like if the – object is going to be spoiled, then it should be sold at any place at any cost.

Question 2.
Clarify the rules of trade as described in the treatise ‘Arthashastra’ written by Kautilya.
Answer:
The following rules have been mentioned by Kautilya in relation to trade-

The sale of items produced in the state should be done at a fixed location.
The sale of items produced in foreign countries should be done at different places at the same price.
He has prohibited exports of arms, horses and food, etc. and imports of these items should be free of charge and tax-free.
Kautilya also determined the profits gained from the business.
Through them, state business has been given priority in the interest of the public.
Prices of commodities should be determined by Panyadhyaksha and Sansthadhyaksha in addition to demand and fulfillment.

Question 3.
Explain the definition of economics as given by Kautilya.
Answer:
The definition of economics by Kautilya is as follows- “Man’s behaviour or livelihood is called Artha. The name of the land with man is Artha. The science that prescribes the measures to develop or nurture such land, is called economics.” Kautilya explains that this economics uses Artha in religion, economy and sensual pleasure and protects it.

Question 4.
Write the sources of state income as listed by Kautilya.
Answer:
The following sources of state income are described by Kautilya :

Different types of land tax, house tax in town, incidental tax, etc.
Tax on items sold in market, Import-Export Tax,
Road Tax, Canal Tax and Tax on heavy loading vehicles,
Artist Tax, Fisheries Tax,
Excise and Taxes on intoxicants,
Property Tax, Forest Produce Tax, Mining Tax, Monopolistic Tax on Salt, etc.
Labour Tax
Contingent Income Tax
Interest on Loans
Charitable Tax
Penalties
State Profits
Taxes on horses, wool, elephants, fruits and trees.

Question 5.
Explain the rules of taxation as given in Kautilya’s tax system.
Answer:
The key rules for taxation in the tax system of Kautilya are as follows:

Timely Tax collection :
According to Kautilya, agricultural tax should be collected only
when the crop has ripened. The King should not impose taxes at inopportune time to collect wealth. .
Appropriate and justified Taxation :
The king should not realize taxes at his will. Kautilya was of the opinion that the King should not recover the tax arbitrarily, but rather it should be recovered affectionately and only once. He should not levy heavy taxes on infertile land.
Taxation in accordance with capability :
Taxes should be levied on all persons, according to their capability.
Importance of Financial Discipline :
Kautilya gave a lot of emphasis on financial discipline. Appointment of revenue workers should be done very thoughtfully, and it should be ensured that whatever is recovered, its entire amount should be deposited in the state treasury.

Question 6.
What, is meant by embezzlement in Kautilya’s view?
Answer:
Kautilya says embezzlement is the irregularity done in management of the state treasury. According to him, not entering the income received in the register, not spending the regular tax entered in the register and refusing to acknowledge the savings, are the three types of embezzlement. Through embezzlement, the person who has been harming the treasury, adhyakshya has right to recover 12 times of the embezzled amount from them.

Question 7.
Explain the rules of leave for workers as propounded by Kautilya.
Answer:
Kautilya clarified that if the work of embroidery is done by women labourers during festivals or holidays, then they should be paid extra wages in addition to food, pulses and goods. If the labourers get sick at the time of incidental work or have suffered adversity, they will be entitled to casual leave. They can send someone in their place to take leave.

Question 8.
Write the major types of Labour Unions as described by Kautilya.
Answer:
Kautilya has given the following types of labour Unions :

Weavers Union
Mining Employee’s Union
Stone-Craftsmen Union
Carpentry Union
Priests Union
Singers Union
Lowly Artistes Union
Buyers-sellers Union
Service Unions

The above unions protect the interests of their members. Kautilya has described labour unions to be very powerful.

RBSE Class 11 Economics Chapter 12 Long Answer Type Questions

Question 1.
Explain the public finance system propounded by Kautilya.
Answer:
Kautilya has stressed on adequate financing for the state, because according to him all the functions of the king depend on the state treasury. If the funds are not sufficiently available to the king then the smooth operation of the state functions becomes also difficult to conduct. Kautilya has said while emphasizing the importance of public finance, that religion is protected only through finance, so the treasury should always be filled. His public finance system is truly linked to the concept of welfare state.

He has mentioned four objectives of the state apart from law and order and justice :

Acquiring the unobtained
Protecting the acquired
Ensuring growth of the protected and
Utilizing the accumulated for the welfare of the subjects, or spending the earnings from taxes for welfare of citizens.

” Kautilya has listed the following sources of State Income :

Different types of land tax, house tax in town, incidental tax, etc,
Tax on items sold in market, Import-Export Tax,
Road Tax, Canal Tax and Tax on heavy loading vehicles,
Artist Tax, Fisheries Tax,
Taxes on intoxicants,
Property Tax, Forest Produce Tax, Mining Tax, Monopolistic Tax on Salt, etc,
Labour Tax
Contingent Income Tax
Interest on Loans
Charitable Tax
Penalties
State Profits
Taxes on horses, wool, elephants, fruits and trees.

The key rules for taxation in the tax system of Kautilya are as follows:

Timely Tax collection :
According to Kautilya, agricultural tax should be collected only when the crop has ripened. The King should not impose taxes at inopportune time to collect wealth.
Appropriate and justified Taxation :
The king should not realize taxes at his whim and fancy. In adverse times, the king should request politely for heavy taxation and impose it only once. Infertile land should never be taxed heavily.
Taxation in accordance with capability :
Taxes should be levied on all persons according to their capability.
Importance of Financial Discipline :
Kautilya laid a lot of emphasis on financial discipline. Appointment of revenue workers should be done very thoughtfully, and it should be ensured that whatever is recovered, the entire amount of money is deposited in the state treasury.

Question 2.
What is meant by duty(toll-tax) according to Kautilya, and clarify the rules of duty as propounded by him?
Answer:
This tax was imposed on articles being taken into or out of the state. Toll-duty was collected at toll posts. The official who collected this tax was called ‘Shulkadhyaksha’, who constructed toll-posts, and collected duty through his assistants and deposited it in the state treasury.

Kautilya divided toll-duty into three categories- external, intermediate and hospitality. Toll tax collected on articles produced within the state were called external, articles produced within the fort and in the capital city were called intermediate tax and articles coming from abroad were termed ‘hospitality.’

Question 3.
Explain the principle of wage determination as propounded by Kautilya and the provisions of social security.
Answer:
Kautilya’s Arthashastra describes several principles of wage determination, which are briefly described below :

Cost of Living theory of Wages :
Kautilya says that a worker’s wages should be sufficient to enable him provision of bodily comforts and allow him to serve his master with complete zest and dedication and enable him to be free from any kind of greed and dissatisfaction. This concept of Kautilya makes clear that the wages of the labourers should be equal to the amount required for the maintenance of life.
Ability Theory of Wages :
Different workers have varying abilities. Skilled and unskilled workers cannot be paid the same wages. Therefore, Kautilya thought that the workers should be paid wages and allowances according to their skill and efficiency.
Productivity Theory of wages :
Kautilya very clearly states that a worker’s salary should be in the ratio of quantity produced by him and the time taken by him to produce that quantity. Wages should be paid to worker only for the work that has been done by him. A worker weaving/ spinning thread should be paid according to the thickness, type of the thread or in accordance with its quality.
Customary Theory of wages :
Regarding the businesses in which there was no definite form of wage determination, Kautilya had said that in such a business, wages should be given as cash or in the form of commodity in practice. He had these views that if an employee does not work then he should be punished.
Share Theory of Wages :
In the professions where it was not possible to fix wages, Kautilya was of the opinion that workers should get a share from the production. Chanakya says that the farmer’s servant should take grain, ghee be taken by shepherd’s servant, the servant of vaishya will take one-tenth part of the items he has sold/handled, but on the condition that his salary is not decided earlier.

Provision of Social Security
Kautilya also made provisions for the welfare and safety of the workers. Some of the major schemes are the following :

Pension Scheme :
Kautilya had also created a pension scheme, according to which if an employee dies while working, his salary should be given to his son and wife in the form of a pension. Not only this, financial aid should also be given to children, elderly and sick family members of such employees. They should be given financial assistance even in the event of death or disease in their home and on the birth of their child.
Rules of Leave :
Kautilya clarified that If the labourers get sick at the time of incidental work or have suffered adversity, they will be entitled to casual leave. They can send someone in their own place to take leave. He also clarified that if the work of embroidery is done by women labourers during festivals or holidays, then they should be paid extra wages in addition to food, pulses and goods.
Preference in Employment for the poor and disabled :
Kautilya made a provision that the king should give employment on a preferential basis to widows, disabled women, artistes, etc. in jobs like spinning and weaving. He also provided for overtime in tasks of spinning and weaving. Temporary and permanent employees should get less or more salaries depending on their ability and work capability.

Question 4.
Clarify Kautilya’s thought on state income-expenditure.
Answer:
Kautilya was of the opinion that the king should try to increase his income more and more due to the conditions generated from time to time and for the smooth management of the state. All the functions of the king depend on the state treasury. If the King’s treasury will be empty, then how will various tasks be accomplished?

Kautilya had said that the king should levy different types of taxes to increase his income, such as land tax, municipal tax, house tax, sales tax, employment tax, tax on drugs, import export etc. The king’s income from various taxes, business, etc. should be spent on the development of the state and public welfare, and the treasurer should keep an account of the state’s income and expenditure. If the income is more than the expenditure, then it should be shown in the fund.

The King should also make adequate arrangements for inspection of income-expenditure, and the name of the accountant should be mentioned in the income-register. He must also arrange to punish the state’s accountant for misconduct or malpractices.

According to him, not entering the income received in the register, not writing the regular tax in the register and refusing to acknowledge the savings, are the three types of embezzlement. According to Kautilya, a penalty of 12 times the loss thus incurred to the state treasury, should be imposed on the officials who harm the treasury by,embezzlement.

It is clear from the above explanation that Kautilya’s tax system had the qualities of equality, diversity, warning of greedy conduct, jurisprudence and he also gave the provision for welfare work from the income received.

Question 5,
Clarify your views on Kautilya’s market organisation and system of weights and measures.
Answer:
Kautilya had stressed on proper currency arrangements and measuring-weighing facility for business. Kautilya considered the panyadhyaksha and the sansthadhyaksha responsible for the price determination of the goods. He said that the sale of items produced in the state should be at a certain place, and the items produced in foreign countries should be sold in many places, so that the public should not have any problem in obtaining these things. It was his opinion that these items should be sold at different places at the same price by the sellers.

Kautilya gave priority to state trade. He supported organized state business in public interest. His policy was to increase import-export, but he prohibited the export of arms and ammunition, horses, grains, etc. The imports of these items were tax-free.

Kautilya was in favour to provide state security for the safety of traders on the commercial routes of the state. Kautilya also advocated control on the benefits of business. He had made such arrangements, that the consumers could get the goods at reasonable prices and traders also got the proper benefit.

To facilitate measuring and weighing, Kautilya has mentioned 16 types of scales and marking of the weights used for weighing. He recommended the appointment of Pautvadhyaksha to check the weights and measure. It is thus clear that Kautilya had made many arrangements to operate the market smoothly.

Question 6.
Which provisions did Kautilya make to prevent market irregularities? Explain.
Answer:
Kautilya is said to be the first thinker in the world, who presented a detailed and planned strategy to regulate the market. He proposed the provision for appointment of five types of officials to prevent black marketing, control of adulteration, controlling fraud and smuggling, etc :

Panyadhyaksha :
This official monitored price determination of commodities and their quality and kept an eye on activities of traders.
Shulkadhyaksha :
He was responsible for collecting duty and taxes from traders, branding commodities and weighing and sale of commodities.
Sansthadhyaksha :
He penalized adultration and prevented it, punished sale of sub-standard articles and traders who weighed less.
Pautavadhyaksha :
His main function was to issue and check weights and measures.
Antapala :
He monitored products coming in from abroad and going out of the state. Kautilya provided for heavy penalties for preventing adulteration. According to him, only authorized persons were permitted storage and trading of commodities. Commodities can only be sold in markets and not at the place of production.

Kautilya also made provision for protection of producers and manufacturers, that is supply. Kautilya says that if traders collude to buy or sell a certain commodity at unreasonable prices, each of them should be fined 1 thousand panas. In the event that traders indulged in speculation and profiteering to make large profits, Kautilya suggested regulation of profits. His view was that not more than 5 percent profit on domestic products and not more than 10 percent profit on the cost of imported products should be earned. Making profits higher than this was made punishable by a penalty of 200 panas.

RBSE Class 11 Economics Chapter 12 Other Important Questions

RBSE Class 11 Economics Chapter 12 Objective Type Questions

Question 1.
According to the Puranas, Kautilya had composed the ‘Arthashastra’
(a) In between 321 To 300 BC
(b) After the duration of 321 To 300 BC
(c) Before the duration of 321 To 300 BC
(d) None of these
Answer:
(a) In between 321 To 300 BC

Question 2.
Kautilya has described the branches of knowledge to be
(a) 2
(b) 3
(c) 4
(d) None of these
Answer:
(c) 4

Question 3.
Priority has been given in the Varta shastra to
(a) Agriculture
(b) Animal Husbandry
(c) Industries and Trade
(d) All of these
Answer:
(d) All of these

Question 4.
Kautilya had fixed the rate of return on foreign goods at
(a) 5%
(b) 10%
(c) 15%
(d) None of these
Answer:
(b) 10%

Question 5.
At the time of Kautilya, land tax was fixed at
(a) 1/5^th of Production
(b) 1/6^th of Production
(c) l/3rd of Production
(d) 1/8^th of Production
Answer:
(b) 1/6^th of Production

Question 6.
No. of departments of tax made by Kautilya was
(a) 1
(b) 2
(c) 3
(d) 4
Answer:
(c) 3

Question 7.
According to Kautilya, those who steal the metals should be penalized
(a) 4 Times of Theft
(b) 5 Times of Theft
(c) 8 Times of Theft
(d) 10 Times of Theft
Answer:
(c) 8 Times of Theft

Question 8.
According to Kautilya, tax should be levied on imported salt from abroad
(a) 6^th portion
(b) 8^th portion
(c) 5^th portion
(d) None of these
Answer:
(a) 6^th portion

Question 9.
According to Kautilya, King should recover the road tax
(a) By the medium of Sansthadhyaksha
(b) By the medium of Panyadhyaksha
(c) By the medium of Antapala
(d) By the medium of Shulkadhyaksha
Answer:
(c) By the medium of Antapala

Question 10.
Those who do poultry and piggery must give their share of income to the state-
(a) 1/2 Portion
(b) 1/4^th Portion
(c) 1/3^th Portion
(d) None of these
Answer:
(a) 1/2 Portion

RBSE Class 11 Economics Chapter 12 Very Short Answer Type Questions

Question 1.
Give the two other names of Acharya Kautilya.
Answer:
The two other names of Acharya Kautilya are – Vishnugupt and Chanakya.

Question 2.
Which four branches of knowledge have been described by Kautilya?
Answer:
The four branches of knowledge described by Kautilya are :

Treyi
Varta
Aanveekshiki
Dandniti

Question 3.
Give the definition of economics by Kautilya.
Answer:
The definition of economics by Kautilya is as follows- “Man’s behaviour or livelihood is called Artha. The name of the land possessed by man is Artha. The science that prescribes the measures to develop or nurture such land, is called economics.” Kautilya explains that this economics uses wealth in Dharma, Artha and Kaam and protects it.

Question 4.
What are the four key goals of state given by Kautilya, other than the peace and justice system?
Answer:Four key goals of state given by Kautilya are :

Acquiring the unobtained
Protecting the acquired
Ensuring growth of the protected and
Utilising the accumulated for welfare of the subjects, or spending the earnings from taxes for welfare of citizens.

Question 5.
Tell the two major sources of income for the State as mentioned by Kautilya.
Answer:

Land Tax, House Tax and Incidental Tax
Sales Tax, Import- Export Tax

Question 6.
How much part of the production received from the farm had to be given to the king?
Answer:
1/6^th part of the production of the farm had to be given to the king.

Question 7.
How much tax was fixed by Kautilya on imported salt from abroad?
Answer:
Kautilya fixed 1/6^th part of tax on imported salt from abroad.

Question 8.
Which officer had the right to recover toll tax?
Answer:
Shulkadhyaksha had the right to recover toll tax.

Question 9.
What punishment did Kautilya arrange for the theft of metals?
Answer:
The punishment arranged by Kautilya for the theft of metals is 8 times of the amount of theft.

Question 10.
What were the rates of road tax determined by Kautilya?
Answer:
According to Kautilya, a vehicle loaded with trading commodities must be taxed 1/4^th pana, 1/2^th pana on animal, 1/4^th pana on small animal and load carried on shoulders of labourers was taxed 1 masha.

Question 11.
What were the rates of aniihal tax decided by Kautilya?
Answer:
Kautilya had fixed the following rates of animal tax

Half of their income on poultry and piggery.
The sixth part of the income of cattle breeding
The tenth part of income on cow, buffaloes, donkeys and camels

Question 12.
State the two rules of taxation.
Answer:
The two rules of taxation are

Timely tax collection
Taxation in accordance with capability

Question 13.
Tell the four main items of public expenditure.
Answer:
The four main items of public expenditure are

Expenditure on religious tasks.
Expenditure on the salary of officials.
Expenditure on armed forces.
Expenditure on road construction

Question 14.
Which two types of savings have Kautilya mentioned?
Answer:
According to Kautilya, savings are of two types-

Obtained saving is that which is present and deposited in the treasury
Committed saving is that which is to be deposited in the treasury.

Question 15.
Explain the four properties of the tax system of Kautilya.
Answer:
The Four properties of the tax system of Kautilya are

Diversity
Equality
Justifiability
Flexibility

Question 16.
Which three types of embezzlement have been mentioned by Kautilya?
Answer:
Following are the three types of embezzlement

Not entering the income received in the register,
Not writing the regular tax in the register,
Refusing to acknowledge the savings

Question 17.
What was the penalty for the loss due to embezzlement?
Answer:
According to Kautilya, a penalty of 12 times the loss should be imposed on the officials who harm the treasury by embezzlement.

Question 18.
State the two principles propounded by Kautilya for the determination of wages.
Answer:

Cost of living theory of wages
Productivity theory of wages

Question 19.
Which are the four types of currencies described in Kautilya’s ‘Arthashastra’?
Answer:
Following are the four types of currencies described in Kautilya’s ‘Arthashastra’ :

Gold Coins
Silver Coins or Karshapan or Pana or Dharan
Standard Copper
Kankani Copper

Question 20.
According to Kautilya, which officials should determine the price of the commodity?
Answer:
Following are the officials who should determine the price of the commodity according to Kautilya :

Panyadhyaksha
Sansthadhyaksha

Question 21.
What was the extent of profit on the sale of the goods determined by Kautilya?
Answer:
Kautilya had fixed the limit of 5% on domestic goods and maximum 10% on foreign goods.

Question 22.
Which goods were forbidden for export, according to Kautilya?
Answer:
According to Kautilya, export of arms, horses and foodgrains was forbidden.

Question 23.
Which goods were free of charge and tax-free according to Kautilya?
Answer:
According to Kautilya, import of arms, horses and food was free of charge and tax-free.

Question 24.
To what has Kautilya given priority among Religion, Artha and Kaam?
Answer:
Kautilya has given priority to Artha among Religion, Artha and Kaam.

Question 25.
What is emergency tax?
Answer:
Kautilya had proposed an emergency tax to be imposed in the state. In such a situation, the king can levy the tax on the rich and can take money by requesting special solicitation from traders, prostitutes and stockmen.

Question 26.
What do you mean by proper and justifiable taxation?
Answer:
Kautilya was of the opinion that the king should not levy taxes arbitrarily, but the rate of tax should be fair and equitable. It is not necessary to levy heavy taxes on infertile land.

Question 27.
What is barter exchange?
Answer:
When a person takes more essential things from another person in return for his less essential thing, then it is called barter exchange.

Question 28.
Explain the function of Sansthadhyaksha.
Answer:
The function of Sansthadhyaksha was to control adulteration, less weighing and the sale of commodities. He had the right to punish people engaged in such activities.

Question 29.
What was the work of Antapala during the time of Kautilya?
Answer:
He monitored products coming in from abroad and going out of the state.

Question 30.
In the ‘Arthashastra’ of Kautilya, which officer’s appointment is mentioned for the care of cattle, buffalo etc.?
Answer:
Gowadhayaksha was appointed for the care of cattle, buffalo, etc. in the ‘Arthashastra’ of Kautilya.

RBSE Class 11 Economics Chapter 12 Short Answer Type Questions

Question 1.
Explain the 5 sources of state income mentioned by Kautilya.
Answer:
Following are the 5 sources of state income mentioned by Kautilya :

Different types of land tax, house tax in town, incidental tax, etc.
Incidental income tax
Taxes on intoxicants,
Property tax, Forest Produce tax, Mining tax, Monopolistic tax on Salt, etc.
Tax on goods sold in market, Import-Export tax.

Question 2.
What is land tax? What is land tax arrangement? Explain it.
Answer:
Land tax is recovered by the king in exchange for the use of agricultural land. The land tax was the main source of state income. The people of the society used to take the land in their possession and produce crops on it, in exchange for this, the people the had to pay 1/5^th of the agricultural produce as the tax to the king. The tax was paid in cash or in the form of farm produce.

Question 3.
What is emergency tax?
Answer:
Kautilya had made provision for emergency tax in the state in the time of adversity, according to him, the state could put an additional tax burden on the rich persons when the king’s exchequer is empty. The king must have sufficient exchequer because the king without funds can neither pay the staff nor work for the welfare of the society.

Question 4.
What thoughts have Kautilya expressed regarding financial discipline?
Answer:
Kautilya was a staunch opposer of extravagance. He was of the opinion that the entire tax collected from the public should be deposited in full in the treasury. To stop corruption in states employees, he had suggested that correct income statement should be kept in the state, and eligible and honest persons should be appointed to carry out this work.

Question 5.
Summarize Kautilya’s views in relation to public expenditure.
Answer:
Kautilya had included in the main items of public expenditure, religious work, wages and pension payments, organization of military force, arrangement of factories, labour wages, expenditure on agriculture, construction of roads, construction of canals, establishment of educational institutions, expenditure on the protection of forests, expenditure on animals, management of the state building works, etc. Kautilya was biased towards proper control over public expenditure. There was also a provision to punish the accountants for irregularities in state expenditure.

Question 6.
Explain Kautilya’s thoughts’ about the agricultural system.
Answer:
Kautilya has given special importance to agriculture in his book Arthashastra. He was of the opinion that the king should appoint an agricultural officer who should collect good seeds of cereals, fruits, vegetables, cotton, etc. and supply them in the fields from time to time. To increase the production, he has also advised the use of suitable fertilisers in the fields. According to him, good manure should be used in fields and not bad manure.

Question 7.
Explain the plans propounded by Kautilya for the safety and welfare of workers.
Answer:
Following are the plans propounded by Kautilya for the safety and welfare of workers :

Pension Scheme :
According to Kautilya, in the event of death of the employee while performing the work, his full salary should be given to his wife / son in the form of pension.
Rules for leave :
The casual leave arrangement was made to the labourer due to the occurrence of an incidental work or in event of adverse situation. The labourer can take leave and send another person in place of himself.
Over-Time :
Kautilya also provided overtime in the work of embroidery, weaving.

Question 8.
Which system is described by Kautilya for currency creation?
Answer:
Currency creation was done only in the government mint. Any person could take his metal to the mint and get it fashioned into currency coins. There was a fixed fee for this work. The officers of the mint were named as the Lakshanadhyakshaya and Sauramik.

Question 9.
How many types of labour unions have been mainly mentioned by Kautilya? Give their names.
Answer:
Following are the types of labour unions mainly mentioned by Kautilya:

Weavers Union
Mining Employees Union
Stone-Craftsmen Union
Carpentry Union
Priests Union
Singers Union
Lowly Artistes Union
Buyers-sellers Union
Service Unions

Question 10.
In brief, state the thoughts of Kautilya in relation to the price determination of commodities.
Answer:
Kautilya had conceived the concept of justified and fair price. In fair price, they used to cover the costs as well as the appropriate benefits. He said that the producer/trader should not take more than 5% profit on indigenous goods, and 10% on foreign goods. According to him, many elements affect the price of the goods such as salaries, transport expenses, customs, festivals, fashion, rent and society, etc. According to him, the price of the goods should be determined by Panyadhyaksha or Sansthadhyaksha appointed by the king.

Question 11.
Explain the productivity theory of wages as propounded by Kautilya.
Answer:
Kautilya was of the opinion that the wages should be in proportion to the amount of labour done by the worker and the time engaged in that production. The worker should be given the wages only for the work done by him. Wages should be given to the cotton-worker, looking at the thickness and quality of the yam. He was of the opinion that the salaries of government employees should be commensurate with their qualifications and work capacity.

Question 12.
What is the participation principle of wages?
Answer:
Kautilya has a view that a farmer’s servant should take share of foodgrains, a dairy owner’s employee should take share of ghee, and a trader’s employee can take share of things traded by him upto 1/10^th part. For determining the salaries of the state employees, the need of state, religion, and ethics, serviceable wages, loyalty to the state, quality of job, performance of the work, etc should be kept in mind. But in any case, the king should not spend more than quarter of his income on the head of wages.

Question 13.
Who were the officials appointed by the provisions of Kautilya to prevent market chaos?
Answer:
Following are the officials appointed by the provision of Kautilya to prevent market chaos-

Panyadhyaksha :
This official monitored price determination of commodities and their quality and kept an eye on activities of traders.
Shulkadhyaksha :
He was responsible for collecting duty and taxes from traders, branding commodities and weighing and sale of commodities.
Sansthadhyaksha :
He penalized adultration and prevented it, punished sale of sub-standard articles and traders who weighed less.
Pautavadhyaksha :
His main function was to issue weights and measures.
Antapala :
He monitored products coming in from abroad and going out of the state.

Question 14.
What were the views of Kautilya regarding the sale of goods?
Answer:
Kautilya was of the view that the arrangements for the sale of the items being procured in the state should be in a certain place. The arrangements for the sale of goods originating abroad should be arranged in many places. Thereby, the public should not suffer. Kautilya was in favour of giving full protection to the traders by the state.

Question 15.
What was the arrangement of income tax obtained from mining?
Answer:
According to Kautilya, state has the right to the land within its boundaries, thus imposition of tax on the mined materials was the king’s right. The official supervising the mines arranged the production and sale of all kinds of ‘Shankh,’ ‘Vajra’, ‘Mukta’, etc. minerals. Salt imported from abroad was taxed 1/6^th its price/cost. One who stole metals was penalized eightfold of the stolen value. One who stole jewels was to be given the death sentence.

Question 16.
What are the rules related to road tax?
Answer:
According to Kautilya, the king should realize road tax from traders through his border guards (Antapalas). A vehicle loaded with trading commodities must be taxed 1/4^th pana, 1/2^th pana on animal, 1/4^th pana on small animal, and load carried on shoulders of labourer was taxed 1 masha.

Question 17.
What method of accounting of income-expenditure was described by Kautilya?
Answer:
Kautilya was of the opinion that the treasurer should keep a complete* description of the state’s income-expenditure. The income-expenditure register should include the name of the month, party, and day, time and name of the author, and the name of the taker. Finally, complete details of savings or balance should be prepared. The accounts should be kept in such a way that the audit of last 60 years of income-expenditure can be seen as required. He also suggested punishment for those who manipulated the accounts of income expenditure.

Question 18.
What was the provision of Kautilya in relation to agricultural credit and assistance?
Answer:
Kautilya’s directive was to provide loans to the fresh growers for food, seeds, bulls etc. and collect the amount lent after harvesting of crops. He arranged for grant on loans to encourage good farmers.

Question 19.
To what was importance given among artha, dharma, and kaama in Kautilya’s Arthashastra?
Answer:
Kautilya gave importance to artha among artha, dharma and Kaama in his Arthashastra. His idea was that the basis of happiness lay in religion and the root of religion is artha, and artha’s basis is the king. According to them, both dharma and kaama rely on Artha. Kautilya has held the money earned in the proper manner as justified. He said, “Wealth is the only thing in the world, religion and work are subject to wealth.”

Question 20.
What is the concept of savings according to Kautilya?
Answer:
According to Kautilya, after accounting for the state’s income-expenditure, the balance remaining is called savings (fund). Savings are of two types :

Obtained savings is that which is present and deposited in the treasury,
Committed saving is that which is to be deposited in the treasury.

Question 21.
What is Customary Theory of Wages?
Answer:
Kautilya was of the opinion that in such systems where there was no definite form of wage determination, according to the practice of business, wages should be given as cash or commodity. Kautilya writes that wages are paid for work, not for sitting idle. Thus, if a worker does not work properly, his tasks should be given to others , or he should be removed from employment.

Question 22.
What were the views of Kautilya regarding giving employment to poor and helpless people? Explain.
Answer:
Kautilya made such arrangements under which widows, physically disabled, women, artists, etc. were.employed on the basis of priority in the work of embroidery and weaving. He also arranged overtime for this work. Fixed and temporary employees received less or more salary in line with their qualifications and work capacity.

Question 23.
What did Kautilya suggest to encourage business?
Answer:
Kautilya said that to encourage business, the state should build waterways, and inland roads, and large markets and mandis. By collecting saleable goods in these markets, they should arrange for their purchase and sale. There should also be security arrangements on the commercial roads of the state. Kautilya wanted the merchants to have a fair advantage and availability of goods at reasonable prices to the consumers.

Question 24.
Explain Kautilya’s views regarding animal husbandry.
Answer:
Kautilya has accepted the importance of livestock. Description of an official named Goadhyaksha’ has been given in ‘Arthashastra’ for care and rearing of cow, buffalo, etc domestic animals. Grazing lands have been mentioned for grazing animals. Wages have been fixed for cow herds who graze animals. One pana each for one animal per annum is the fixed wages. Realising the importance of animal wealth, Kautilya mentions rules for arrangement of foods and water for animals and stringent action against those who harms animals.

Question 25.
Give a brief introduction to Kautilya.
Answer:
Kautilya’s real name was Vishnugupta. He helped destroy the Nanda dynasty and placed Chandragupta on the throne. His ideology was materialistic. For this reason, the then priestly class gave him the name Kautilya to give hint of his evilness. Acharya Kautilya had more knowledge than any other teacher. He contemplated upon contemporary economic problems and the economy. Kautilya is also known as Chanakya.

RBSE Class 11 Economics Chapter 12 Long Answer Type Questions

Question 1.
Describe the rules of taxation as described in Kautilya’s Arthashastra.
Answer:
Kautilya’s economics describes a number of taxation rules. These rules are related to the amount of tax, recovery methods, and methods of taxation. A brief description of the rules is as follows-

Appropriate and Justified Taxation :
The king should not realize taxes at his whim and fancy. In adverse times, the king should request politely for heavy taxation and impose it only once. Infertile land should never be taxed heavily.
Timely Tax Collection :
According to Kautilya, agricultural tax should be collected only when the crop has ripened. The king should not impose taxes at inopportune times to collect wealth.
Taxation in accordance with capability :
According to Kautilya everyone should be taxed according to their capability. This makes the tax collection easy and people do not oppose it.
Financial Discipline :
Kautilya laid a lot of emphasis on financial discipline. According to him, all taxes obtained from the people should be deposited in the treasury. Honest and qualified staff should be appointed for this work. Income from taxation should not be misused. There should be a proper arrangement that the employes involved in this work are not involved in corruption.

Question 2.
Describe the key welfare schemes described by Kautilya.
Answer:
Following are the key welfare schemes described by Kautilya :

Pension Scheme :
According to Kautilya, in the event of death of the employee while performing the work, his full salary should be given to his wife/son in the form of pension.
Rules for leave :
The casual leave arrangement was made to the labourer due to the occurrence of an incidental work or any adversity. The labourer can take leave and send in another person in place of himself.
Overtime :
Kautilya also provided for overtime in the work of embroidery, weaving done on festivals, holidays, etc.
Preference in employment to the poor and helpless :
Kautilya made such arrangements under which widows, physically disabled, women, artists, etc. were employed on the basis of priority in the work of embroidery and weaving. He also arranged overtime for this work. Fixed and temporary employees received less or more salary in line with their qualifications and working capacity.

Question 3.
Explain the concept related to price determination of commodities propounded by Kautilya.
Answer:
Kautilya propounded the concept of justified and appropriate prices in the sphere of price determination. He included an article’s production cost and a reasonable profit in justifiable price of a commodity. A justified price does not reduce producer’s motivation as in a socialist economy, nor does it overburden the consumer’s pocket as in a capitalist economy. If the price remains below production cost, the producer will stop producing that product, and unemployment will increase. On the other hand, consumer demand will decrease if prices are too high. In both situations, production will drop and unemployment will increase.

According to Kautilya, determination of prices of commodities should be done by officials appointed by the king, called ‘Panyadhyaksha’ and ‘Sansthadhyaksha.’ Kautilya suggests to the ‘Panyadhyaksha’ (head of commerce) regarding determination of price that he should ascertain whether a commodity has a demand in the market or not. He says that the fluctuation in prices are linked to demand and supply. Prices of commodities rise with increasing demand, while prices decrease with increasing supply. In this way Kautilya factors in the principle of demand and supply in price determination while advocating state control in price determination.

According to Kautilya, many elements affect the prices of commodities. Prices should be decided after calculating the salaries, transportation cost, rent, state of society, etc. According to him, the chief of markets should consider the benefit of society along with other elements. He suggested that readily perishable goods like milk, vegetables, etc. should be sold off at the earliest at any place and at any price since these things spoil very quickly. Kautilya says that if prices increase at the behest of traders and workers, then it is against the principles of justice. Therefore, determination of prices of things should be done in accordance with the country and the time.