(This weekly column will explore the relevance and application of Principles and Strategies discussed in the 3rd Century BC treatise, Kautilya’s Arthashastra, in Today’s Corporate World)

For Kautilya, the subjects and their welfare was more important than kingship. Every idea in the Arthashastra is directed towards this end. Thus every CEO has to take into consideration the welfare of his employees first, which will ultimately be his own benefit.

The Arthashastra clearly shows that Kautilya had a vision for the Welfare of the society,

“In the happiness of the subjects lies the benefit of the king and in what is beneficial to the subjects is his own benefit” (1.19.34)

Arthashastra evolved a wage structure, which provides the protection of workers against exploitation or unduly low wages and also to facilitate justice and fairness for the sound relationship between the employer and the employee.


What had been visualized by Kautilya in 3 B.C. found its way in the Minimum wages act of 1948. It recognizes that wages cannot be left to be fixed by market forces of supply and demand alone. Workers also had a choice to choose their work and enter into a contract before starting any work.

If the employee gets sick he is also given due consideration,

“If he is incapable due to ill health or due to a calamity, he shall get an extension” (3.14.2)

Whatever salary was fixed for labourers, the master was obliged to pay it, and in case the rule was violated, he had to undergo punishment,

“In case of Non Payment of the wage, the fine is twelve panas or five times the wage” (3.13.34)


However, the wage structure was not a one sided approach. The employer’s efforts were also safe guarded. Productivity of the workers was taken into consideration while paying wages,

“A wage is for work done, not for what is not done” (3.14.8)

According to Kautilya if the labourer after receiving the wages, did not complete his work he was fined,

“An employee not doing the work after receiving the wage, the fine is twelve panas, and detention till it is done” (3.14.1)

If the employee did not return to his work, the master was at liberty to engage another worker,

“In case the employee misses the time (or completion) or does the work in a wrong manner, he may complete the work through another” (3.14.10-14)


But how do we decide what is the correct wage? For this, we will have to meet the current industry standards and also consider the time and effort that is put in a work,

“The payment of the wages was decided on the basis of work done, time spent in doing it, at the rate prevailing at the time” (3.13.27)

This concept has been adopted by the committee of Fair wages, Govt of India, set up in 1949 which prescribed,

“The prevailing rates of wages in the same or similar occupations in the same or neighbouring localities” (Report of the Committee of fair Wages, Delhi, 1954)

(The author is the director of ATMA DARSHAN, a company that provides spiritual services, including management education and tours. He can be contacted at radhakrishnan@atmadarshan.com)

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