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Pandit Shyam Shashtri obtained the 15 volumes of Arthshashtra from oriental library of the king of Mysore. He then complied it in 1909 and published whole Arthshashtra of Kautilya.

Influence of economic thoughts in India:

• Economic ideology can also be seen in Indian scriptures such as ‘Shantiparva’ in ‘Mahabharat’, ‘Manusmruti’, ‘Shukra-niti’ and ‘Kamandikiya’.
• ‘Kautilya’s Arthshashtra’ stands first in Indian writings and thoughts related to economics.
• In India, large numbers of thinkers have influenced Indian economic thoughts right from the ancient times, to the medieval times to the present day. ‘Kautilya’ i.e. Chanakya, ‘Gandhiji’ and ‘Pandit Deendayal Upadhyay’ were among those few.

• The thoughts that are related to human life and their economic activities are called economic thoughts.
• These thoughts are about management of economy, production, revenue, distribution, employment, money, exchange, economic development, banking, solutions to financial and environment problems.
• Economic thoughts of many great thinkers in various countries have influenced decisions of state administration related to management of O resources, production, cost, distribution, etc.
• For example, following people highly influenced the economic thought process of the western countries:
• Adam Smith’s ideas provide insights into how wealth is created, distributed and exchanged.
• Prof. Alfred Marshall provided importance of keeping human welfare at the centre of decision making.
• Prof. Robbins gave ideas related to scarcity, problem of choice and optimum utilization of resources.
• Prof. Keynes provided a new direction to macroeconomics by giving principles regarding consumption, investment, employment and government intervention after the great depression of 1929-30.

Influence of economic thoughts in India:

• Economic ideology can also be seen in Indian scriptures such as ‘Shantiparva’ in ‘Mahabharat’, ‘Manusmruti’, ‘Shukra-niti’ and ‘Kamandikiya’.
• ‘Kautilya’s Arthshashtra’ stands first in Indian writings and thoughts related to economics.
• In India, large numbers of thinkers have influenced Indian economic thoughts right from the ancient times, to the medieval times to the present day. ‘Kautilya’ i.e. Chanakya, ‘Gandhiji’ and ‘Pandit Deendayal Upadhyay’ were among those few.

Gandhiji used to read books on philosophy, religion, sociology, etc. These books greatly influenced Gandhiji economic, social and political ideology. Gandhiji’s approach towards people and his deeds were also a result of these readings.

• For example, Gandhiji was greatly influenced by the American thinker Thoreau. Gandhiji adopted the idea of ‘Simple living and high thinking’ from Thoreau’s works.
• Gandhiji’s idea of ‘Sarvodaya’ was an inspiration from British writer John Ruskin’s book ‘Unto the last’. From this book, he derived the importance of labor work and ways to eradicate poverty from India.
• Gandhiji was also influenced by Leo Tolstoy’s works, ‘What shall we do then?’ and The Kingdom -of God is within you .
• Based on the theory of ‘bread labour’ given by Ruskin Gandhiji gave the ‘Bread labour’ theory and the motto that people should work and earn their bread and those who do not work have no right to eat.
• Gandhiji’s belief of ‘labouring for one’s own bread’ also exists in one of the shlok’as in the 3rd chapter of Hindu Scripture, the ‘Bhagwad Gita’.
• The play ‘Satyawadi Raja Harish Chandra’ taught him the importance of truth and made him a ‘Satyagrahi’.
• Thus we can say that Gandhiji’s persona, character and deeds were the outcome of being an avid reader.

• Pandit Deendayal believed that even though the capitalist and socialists countries have abundant resources, human beings face many complexities and problems that are created due to man’s race blind race for prospe-ity.
• As per him, on one hand the capitalist and socialist nations have attained economic growth and development but on the other hand these systems have also created the problems of exploitation, inequality, economic instability, class struggle and pollution.

Problems of exploitation, inequality, economic instability, class struggle and pollution.

Gandhiji’s doctrine of trusteeship:

• Trusteeship is a socio-economic philosophy that was put forward by Gandhiji. This philosophy provides a means by which the wealthy people would be the trustees of trusts that looked after the welfare of the peopleJn general. He gave this principle by taking inspiration from the ‘Bhagwad Gita’ and the ‘Ishopanishad’.
• As per the ishopanishad, ‘All that is created on the earth is because of God and hence we must relish it after surrendering it’.
• Through the doctrine of trusteeship, Gandhiji says that if a person has inherited and accumulated large amount of wealth he should form a trust of excess wealth and use it for the betterment of the deprived.
• He also said that a person requires only as much wealth as is necessary for a dignified living and that the excess wealth belongs to the society.
• The owners of wealth and capitalists can voluntarily act as trustees of their wealth. These trustees should be allowed to maintain their possessions. Then the trustees should use their talent to increase the wealth, not for their own sake but for the sake of the nation that too without exploitation.

Important aspects of Gandhiji’s doctrine of trusteeship:
1. Convincing the rich (Change of heart):

• Gandhiji was a worshipper of truth and non-violence. He advocated that a person needs to voluntarily follow the principle of trusteeship i.e. not by force or unwillingness.
• The philosophy of trusteeship was Mahatma Gandhi’s unique contribution as a tool to social change. He called it ‘the technique of change of heart’.
• He did not consider it appropriate to seize the wealth of rich or collect it by imposing high taxes on the rich and then redistributing it.
• Trusteeship to him meant – ‘Being responsible for one’s life, as well as for the life of the neighbour’. The rich can accumulate wealth because of resources obtained from the society and because some people remain poor. Hence the excess wealth of the rich must be used for benefitting the poor by forming a trust. Then the rich should themselves undertake activities for the welfare of the poor.

2. Duty instead of right:
As per Gandhiji the rich should feel the responsibility of using the excess wealth for benefits of the society rather than just maintaining their right over wealth.

3. Awareness, referendum and social change:

• Trusteeship is a source of revolution or radical social change.
• One cannot enforce it. One should take it up voluntarily for bringing the social change.
• Gandhiji did not promote the idea of very high taxes and forceful seizure of wealth of the rich.
• He believed that a public opinion can be built for bringing about a social change

4. Importance of the interest of the whole society:

• Gandhiji believed in working for the greater good. He believed that it was good that a large number of people get the benefit of welfare instead of few individuals.
• Hence, Gandhiji emphasized on large scale production of goods which could fulfill the necessity of the large population.

5. Compensation to the trustee:
Gandhiji believed that the state should have provision to compensate the trustees for their service.

6. Opposition to nationalization:

• Nationalization refers to transferring ownership of resources owned by private individuals to the state.
• Gandhiji opposed the idea of nationalization of resources for production and abolishing the property rights owned by the private individuals for bringing economic equality in the state.
• He believed 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.

7. Appointing the successor:

• Gandhiji’s idea of trusteeship aimed at appointing a successor to the wealth of the trust.
• According to him, the legal owners of wealth should become the official trustees. The trust should not be entrusted to the society or the state.
• The actual owner should act as a representative of the society. This way the society will own the resources indirectly.
• The current trustee can name the successor who would be the trustee after her/his death. The new trustee would also be a representative of the assets of the trust and not the owner of the assets. The state must monitor the functioning of the trust.
• The state or society cannot seize the property of the trust. The successor should be appointed through a legal procedure.

8. State control:

• When the owners do not form a trust of their wealth voluntarily, the state under certain cases can direct the use of private wealth with minimum force or violence.
• Gandhiji suggested this only for some forms of wealth and not for all types of wealth. This can be done after evaluating the ways in which wealth was accumulated.
• The state can take control of some types of private property after providing adequate compensation to the owner.
• In the context of principle of trusteeship, Gandhiji stated three forms of ownership. They are:
  1. Ownership with the private sector
  2. Formation of a trust
  3. Ownership with the public sector.
• Gandhiji also expressed his thoughts regarding, ‘Swadeshi movement’, co-operation, importance to small, cottage and village industries, equality, dignity of women, etc.
• His thoughts focused on welfare and humanism.
• Modern day economists take reference from Gandhiji’s views from tin,e to time to provide a new direction to the world.
• One can also find solutions to the problems of poverty, unemployment, inequality, concentration of economic power, etc. in principles given by Gandhiji.

Awareness, referendum and social change:

• Trusteeship is a source of revolution or radical social change.
• One cannot enforce it. One should take it up voluntarily for bringing the social change.
• Gandhiji did not promote the idea of very high taxes and forceful seizure of wealth of the rich.
• He believed that a public opinion can be built for bringing about a social change

Correct option is (A) Gram Jyoti Yojna

Correct option is (A) Limiting consumption

Correct option is (D) Both (A) and (B)

As per Gandhiji the rich should feel the responsibility of using the excess wealth for benefits of the society rather than just maintaining their right over wealth.

Opposition to nationalization:

• Nationalization refers to transferring ownership of resources owned by private individuals to the state.
• Gandhiji opposed the idea of nationalization of resources for production and abolishing the property rights owned by the private individuals for bringing economic equality in the state.
• He believed 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.

Correct option is (A) State treasury

As per the ishopanishad, ‘All that is created on the earth is because of God and hence we must relish it after surrendering to it’.

Gandhiji stated that welfare increases when wants are limited. So he believed real happiness lies in simple living.

The strange thing was that Chanakya was born with a full set of teeth.

Chanakya spent his childhood in the village of Kusumpur of Patliputra Kingdom; He served EmjDeror Chandra Gupta Maurya of Maurya Dynasty.

Chanakya’s original name was Vishnu Gupta; He was also known as Kautilya.

Correct option is (B) Using moral values and strategy to create a prosperous state

Correct option is (D) All of these

Capitalism and socialism are the two practical systems followed by the world for achieving economic goals. Pandit Deendayal presented a third option or say a third system that a nation can follow. Pandit Deendayal suggested the system of ‘an integral economic policy’ which is based on ‘integral humanism’ as a third option to overcome difficulties caused due to capitalism and socialism.

Correct option is (B) Destroys the ethical and intellectual character of society

State control:

• When the owners do not form a trust of their wealth voluntarily, the state under certain cases can direct the use of private wealth with minimum force or violence.
• Gandhiji suggested this only for some forms of wealth and not for all types of wealth. This can be done after evaluating the ways in which wealth was accumulated.
• The state can take control of some types of private property after providing adequate compensation to the owner.
• In the context of principle of trusteeship, Gandhiji stated three forms of ownership. They are:
  1. Ownership with the private sector
  2. Formation of a trust
  3. Ownership with the public sector.
• Gandhiji also expressed his thoughts regarding, ‘Swadeshi movement’, co-operation, importance to small, cottage and village industries, equality, dignity of women, etc.
• His thoughts focused on welfare and humanism.
• Modern day economists take reference from Gandhiji’s views from tin,e to time to provide a new direction to the world.
• One can also find solutions to the problems of poverty, unemployment, inequality, concentration of economic power, etc. in principles given by Gandhiji.

Gandhiji’s views on importance of labour:

• Gandhiji promoted the idea of equitable i.e. fair remuneration for different types of labour.
• Out of the four factors of production, labour is the only live factor of production. So, anyone who labours i.e. works is entitled to live a dignified life.
• He also believed that there should be enough opportunities for everyone to work. He believed that it is the duty of the state to create employment ‘ opportunities.
• Stressing on the importance of labour Gandhiji emphasized that although mental/intellectual labour is important for development, everybody should engage in some form of physical labour too.
• Gandhiji observed that in modern times, people give less importance to physical labour and more to mental/intellectual labour. Hence, he believed that if a person does some dedicated physical labour only then he can understand the pain of physical labour and so would give up greed. This would also enable the person to get employment and free himself from poverty.

“To satisfy unlimited wants the society invents new methods and factors and such methods on the other hand create newer problems and also create the risk of destroying human values. So our economic goal should be to limit consumption. Keeping in mind the development of the nation,.consumption and production limits should be decided and maintained.”

Convincing the rich (Change of heart):

• Gandhiji was a worshipper of truth and non-violence. He advocated that a person needs to voluntarily follow the principle of trusteeship i.e. not by force or unwillingness.
• The philosophy of trusteeship was Mahatma Gandhi’s unique contribution as a tool to social change. He called it ‘the technique of change of heart’.
• He did not consider it appropriate to seize the wealth of rich or collect it by imposing high taxes on the rich and then redistributing it.
• Trusteeship to him meant – ‘Being responsible for one’s life, as well as for the life of the neighbour’. The rich can accumulate wealth because of resources obtained from the society and because some people remain poor. Hence the excess wealth of the rich must be used for benefitting the poor by forming a trust. Then the rich should themselves undertake activities for the welfare of the poor.

Correct option is (C) Appointing the successor

Restricting consumption:

• As per Pandit Deendayal, “To satisfy unlimited wants the society invents new methods and factors and such methods on the other hand create newer problems and also create the risk of destroying human values. So our economic goal should be to limit consumption. Keeping in mind the development of the nation, consumption and production limits should be decided and maintained.”
• He proposed that a country should frame a policy to limit the national consumption and hence make itself self-reliant.
• Developed nations also face problems related to insufficient raw materials, increasing crude prices, inflation, race for armament, product quality as well as increasing national stress and environmental issues. Hence, developed capitalist nations also got influenced by Deendayal’s idea of limiting consumption.
• These countries have started working towards applying the concept of limited consumption to resolve certain issues.
• The standard of living of many Indians is quite low. Hence, Pandit Deendayal believed that the state should made unarguable efforts to raise the standard of living of people.
• In order to raise the standard of living, production should be increased and appropriate distribution must take place. This is possible only by limiting consumption.
• He states that a person should have its needs within the limits of his income.

Pandit Deendayal said, “To satisfy unlimited wants the society invents new methods and factors and such methods on the other hand create newer problems and also create the risk of destroying human values. So our economic goal should be to limit consumption. Keeping in mind the development of the nation, consumption and production limits should be decided and maintained.”

Decentralization refers to transfer of authority from central to local government.

To solve the problems of centralized economies Gandhiji promoted the idea of increasing the use of ‘khadi’ and the idea of spinning khadi as a household industry.

Correct option is (B) Ethical science

• Gandhiji observed that in modern times, people give less importance to physical labour and more to mental/intellectual labour.
• Hence, he believed that if a person does some dedicated physical labour only then he can understand the pain of physical labour and so would give up greed. This would also enable the person to get employment and free himself from poverty.

Correct option is (C) Truth and non-violence

simplicity and non-possession:

• Man’s greed and race for increasing his material possessions by ignoring all the ethics leads to the problems of economic life.
• Hence, Gandhiji propagated the idea of ‘non-possession’ and ‘consume to satisfy the needs not the greed’.
• He advised people to restrict their wants and try to get contentment.
• To practice what he preached, Gandhiji followed the principle of ‘simple living and high thinking’ his entire life.

He stated the following reasons for restlessness in human life:

1. Continuously increasing wants
2. Use of complex machines
3. Distribution systems of present times which create unequal distribution

• To explain the relationship between wants and welfare, Gandhiji stated that welfare increases when wants are limited. So he believed real happiness lies in simple living.
• He advised that the state should take decisions related to production and distribution by considering the needs of people.
• He insisted the idea of ‘everyone’s livelihood without anyone’s exploitation.

Decentralized economy:

Gandhiji favoured a decentralized economic system for India. Decentralization refers to transfer of authority from central to local government. Under this concept, Gandhiji wanted economic power to be distributed among several Indians rather than few.

• According to him, any process of economic development should have a prime focus on developing the villages. He wanted villages to get equal benefits of development as cities which he believed can happen only through decentralized planning.
• He gave the idea of decentralized economic planning as an alternative to capitalist planning. To solve the problems of centralized economies he promoted the idea of increasing the use of ‘khadi’ and the idea of spinning khadi as a household industry.
• The concept of decentralized economic planning was rooted in the idea ” of ‘Gram Swaraj’ i.e. village empowerment/village self-reliance.

The tax collected by the state from farmers on land holding is called land revenue.

Through Sarvodaya, Gandhiji had a vision of a non-violent society in which the helpless, poor and needy are uplifted to a state of wellbeing. Thus, ‘Sarvodaya’ aims at social development. The ideas of renunciation, service, reducing dependence on machinery, protection of labour, decentralization of power and prevention of exploitation.

Gandhiji adopted the idea of ‘simple living and high thinking’ from Thoreau’s works.

According to Kautilya, external charges are taxes for goods produced in a country.

Objectives of Indian Economy According to Pandit Deendayal Upadhyay:

• As per Pandit Deendayal, capitalism and socialism have failed to soLve the problems of human beings.
• Hence according to Pandit Deendayal, India should neither follow capitalism nor socialism.
• He stated that India needs progress and happiness of her people.

With respect to the above mentioned issues, Pandit Deendayal gave the following objectives that Indian economy should adopt:

1. India should ensure a minimum standard of living to all.
2. Security of the nation must be an important goal.
3. India should make effort to progress gradually. To do so it should develop new methods that helps her to contribute in world development.
4. In order to attain the goal of development, all the young and able people should get the opportunity to work.
5. Natural resources must be used judiciously.
6. India should adopt such production processes which are in accordance with the factors of production.
7. Human beings must not be neglected in economic planning. In fact economic planning must take into consideration the social, cultural and other values of human life.

India should adopt a practical approach to decide whether the ownership should be given to the state or private individuals or to organizations in various sectors.

• Pandit Deendayal also suggested ways for develpping agriculture, industry, marketing, rural economics and ‘concept of swadeshi’.
• Many states have implemented schemes based on his ideology.
• On 16 October, 2014 India launched ‘Shramave Jayate’ plan which was based on Pandit Deendayal’s theory of importance of labour and employment to all.
• In the honour of Pandit Deendayal India also launched ‘Deendayal Upadhyay Gram Jyoti Yojana’ for the development of agro and rural industries.
• Till date solutions of various economic problems can be found in Pandit Deendayal’s economic thoughts.

• In India, the idea of managing the state is as old as its culture.
• We can find references of ideal methods of politics and diplomacy, policy making, rules of governance, ‘dandniti’ (policy of punishment by the state), etc. in ancient Indian literature.
• Economic ideology can be well seen in Indian scriptures such as ‘Shantiparva’ in ‘Mahabharat’, ‘Manusmruti’, ‘Shukra-niti’ and ‘Kamandikiya’.
• ‘Kautilya’s Arthshashtra’ stands first in Indian writings and thoughts related to economics.
• We can also find solutions to present day economic problems by studying our ancient literature and philosophy given by sages.
• Such philosophy which was given thousands of years ago in India provides practical guidance for making individual life as well as social life easier.

Pandit Deendayal Upadhyay:

• Pandit Der dayal was born on 25th September, 1916. He had a simple yet gentle personality and sparkling eyes.
• He was a profound philosopher, an integral humanist a scholar in politics and economics yet he lived a simple life.
• During his life of just 52 years, Pandit Deendayal worked for the development of the country by involving people from the lowest strata considering the economic condition of those times.
• He presented his ideas on philosophy, economics, sociology and literature. His scholarly skills earned him a name in the areas of social organization, journalism and politics.

Some of his works include:

• Rashtra Jivan Ki Samasyayen
• Devaluation: A Great Fall
• Political Diary
• Rashtra Chintan
• Integral Humanism
• Rashtra Jivan Ki Disha
• Bharatiya Arthniti: Vikas Kl Disha
• Akhand Bharat Kyon?

Some of his works include:

• Rashtra Jivan Ki Samasyayen
• Devaluation: A Great Fall
• Political Diary
• Rashtra Chintan
• Integral Humanism
• Rashtra Jivan Ki Disha
• Bharatiya Arthniti: Vikas Kl Disha
• Akhand Bharat Kyon?

Pandit Deendayal’s concept of the search for the third option:

• Capitalism and socialism are the two practical systems followed by the world for achieving economic goals. Pandit Deendayal presented a third option or say a third system that a nation can follow.
  He expressed that the methods of production have become quite advanced and so the use of machinery has also increased. ‘
• He believed that although the world has abundant resources, human beings face many complexities and problems that are created due to man’s blind race for prosperity.
• As per him, on one hand the nations have attained economic growth and development by adopting capitalism or socialism but on the other hand these systems have also created the problems of exploitation, inequality, economic instability, class struggle and pollution.
• India blindly followed the western economic system. Hence, in spite the fact that India did good economic planning several economic problems like low productivity in agriculture and industries, insufficient rural infrastructure, poverty, unemployment, inflation, excessive urbanization, pollution, devaluation of rupee, etc. have been always there.
• Pandit Deendayal suggested the system of. ‘an integral economic policy’ which is based on ‘integral humanism’ as a third option to overcome difficulties caused due to capitalism and socialism.

Nationalization refers to transferring ownership of resources owned by private to state controlled.

From Bhagwad Gita and Ishopanishad.

Gandhiji opposed the idea of nationalization of resources for production and abolishing the property rights owned ’by the private individuals for bringing economic equality in the state. He believed such nationalization would decrease the morals and ethics of people and turn them against the state.

A system established by the king for administration of the kingdom. In modern times it is a system governed by a body of representatives is called a state.