Taxation and Revenue Collection in Ancient India

Abstract

Taxation and revenue collection comprise one of the most significant and pivotal aspects of any system of administration and governance. The basic structure of taxes ultimately provides for revenue collection for the state machinery and is the basis of state functioning. The plans for societal development and overall progress of the state can be materialized only when the condition of public finances is conducive to the state’s efforts in this direction. Ancient Indian political thinking has always considered the issue of public finance to be of prime importance, and this is why the Mahabharata, Manusmriti, the Arthasastra and Shukranitisar provide detailed descriptions of the ways and means of creating an abundant treasury (Kosha), which is the inseparable part of the seven organs of the state machinery (Saptanga). These treatises discuss the methods of revenue collection, along with describing the modes of taxation, with specifications for levying normal and additional taxes in different conditions and for different categories of citizenry. The present study tries to explain the nature and structure of taxation and revenue collection, as narrated by Vyasa, Manu, Kautilya and Shukra in their monumental classics, with a perspective on financial administration and public finance in ancient India.