The Honey on the Tongue — What Kauṭilya knew about wealth, tax and temptation that a developed India still needs

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Blossomed, Not Assembled · Volume III of VI · Parts Twelve to Fifteen

The first two volumes argued that India cannot copy its way to development, and that what it inherits must be tested before it is kept.

← Previous: II · A Trophy, a Museum or a Weapon? · Series hub · Next: IV · A Boy, a Pot and Thirty Wards →

Kauṭilya said no official can handle public money without tasting it. India's older texts give hard tests for what India still gets wrong: borrowing, freebies, a narrow tax base and prisons full of people awaiting trial.

In Brief: For readers who want to know whether India's ancient texts have anything practical to say about money and government. The essay explains the Vedic idea that every person is born in debt, Kautilya's four duties of power toward wealth, the bee-and-sun test for fair taxes, and his design for officials who will be tempted. It tests each against India today: public borrowing, election freebies, an income-tax base where most returns show no tax due, prisons where most inmates await trial, and direct benefit transfer. It is honest about where the old chain of learning failed.

India's older texts hold three ideas a developed India can still use: each generation is born in debt and must pay it forward, power owes four separate duties to wealth, and honest government is built for officials who will be tempted. I read these ideas in the Vedic teaching on debt, in Kauṭilya's Arthaśāstra, in the Tamil Tirukkuṟaḷ and in a deposit carved into a cave at Nāsik. Then I test each one against India now: its borrowing, its election giveaways, its narrow income-tax base, its crowded prisons and its leaking schemes. The texts give tests, not answers. They cannot set a tax rate or a borrowing limit. They can tell us which taking is fair, which giving carries people across, and why good people are not enough. They also show where the old chain of learning failed, because it kept its gate shut by birth.

Opening — A Cave at Nāsik, Two Weavers' Guilds and Money Meant to Last Forever

Some time around 120 CE, in a cave cut into a hill above Nāsik, a man had the terms of a gift carved into the rock. His name was Uṣavadāta. He was the son-in-law of Nahapāna, a Kṣatrapa ruler of western India, from a family of Śaka, or Central Asian, descent.¹˒²

The inscription is dated in year 42 of an era it does not name. Some scholars read it as the Śaka era, which gives a date near 120 CE. Others place Nahapāna decades earlier, in the first century. The date is disputed, and nothing in this volume depends on the exact decade.²

The cave was given to the saṅgha of the four quarters, the Buddhist order open to monks from anywhere. With the cave came money. Uṣavadāta placed 2,000 kārṣāpaṇas, the silver coins of the day, with a guild of weavers at Govardhana, near Nāsik. The guild was to pay interest at one per hundred a month. He placed another 1,000 with a second weavers' guild, at three-quarters per hundred a month.¹

The coins were never to be paid back. Only the interest was to be spent. The first deposit paid robe-money of twelve kārṣāpaṇas a year to each of twenty monks who spent the rainy season in the cave. The second paid for their other needs.¹ The arithmetic closes exactly. One per hundred a month on 2,000 coins is 240 coins a year, and twenty monks at twelve each is 240.

The Prakrit text also records that the gift was registered at the town's assembly and at the record office, as custom required. It names the money akṣaya-nīvī, "imperishable capital", which Senart translated as "perpetual endowment".¹

Count the people inside that one deposit. The donor came from a ruling family of Central Asian origin, and in another inscription at the same caves he records lavish gifts to Brahmins.³ The beneficiaries were Buddhist monks. The bankers were two guilds of weavers, who were neither. The clearest early record of patient capital on this soil that I know of belonged to no single community.

It was not pure charity either. Uṣavadāta was a ruler's son-in-law, and gifts to monks and Brahmins brought merit, standing and, I infer, legitimacy for a ruling family of foreign origin. The inscription proves this one deposit. It does not prove a uniform system of such funds across ancient India.

The deposit was built to outlive the man who made it. It opens the question this volume follows. How does a people make wealth and duty outlast the lives of those who hold them? India's older texts give four answers worth testing: a teaching on debt, four duties of power toward wealth, a test for fair taxation, and a design for officials who will be tempted.

Part Twelve — You Were Born in Debt. To Whom?

Most modern talk of development begins with rights, with what a citizen is owed. The oldest Indian accounts of a human life begin somewhere else, with what a person owes.

The earliest statement is in the Taittirīya Saṃhitā of the Black Yajurveda. It says that a brāhmaṇa, a man of the priestly class, is born with three debts. He owes the ṛṣis, the seers, and repays them by study. He owes the devas, the gods, and repays them by sacrifice. He owes the pitṛs, the ancestors, and repays them with children.⁴ As first written, this was the debt of one class, and it was a ritual debt.

A later text of the same tradition widens the circle. The Śatapatha Brāhmaṇa begins its account with a sentence that leaves no one out:

ṛṇaṃ ha vai jāyate yo 'sti Whoever exists is born as a debt. Śatapatha Brāhmaṇa 1.7.2.1, trans. Julius Eggeling (wording simplified)

The passage names four creditors.⁵ Three are the old ones. The fourth is new. It is other human beings, and the debt to them is paid by giving them shelter and food.

By the time a householder's duties were set down as the pañca-mahāyajñas, the five great daily offerings, the list had grown again.⁶ Manusmṛti, the law book of Manu, names them plainly. Teaching is the offering to sacred knowledge. Water and food given for the dead are the offering to the ancestors. The fire offering goes to the gods, a food offering goes to all living beings, and hospitality to guests is the offering to humans.⁷

I read these lists together as something close to a balance sheet of what a person receives without earning it. No single text says this. It is my reading. You did not produce the knowledge your life depends on, or make the rain, the soil and the river. You did not give yourself your language or your family, or build the society of strangers who feed and shelter you. For each of these, the texts say, you are in debt from birth.

A debt like this must run both ways, or it becomes a weapon. Inherited benefits create obligations. Inherited injustices create a duty of repair. Inherited privilege creates no right to keep unequal arrangements. A society cannot demand repayment from people it denied education and dignity, because it has not yet paid what it owed them.

A European writer reached a similar picture from another direction. In 1790 Edmund Burke called society a partnership "between those who are living, those who are dead, and those who are to be born".⁸ Burke used the idea to resist sudden change. The Indian texts use it to assign duties. Both refuse to let the living treat themselves as owners of what they hold.

Two features of the Indian teaching matter for a country trying to develop.

The debt runs forward

The first feature is direction. Each debt faces backward and is paid forward. You cannot repay a dead teacher, so you repay him by teaching. You cannot repay your ancestors, so you repay them by raising the next generation. The creditor is in the past, and the payment goes to the future.

Modern economies often run the other way. The quarterly result, the five-year term and public borrowing whose cost falls on people too young to vote all draw on the future to pay the present. The teaching on debt draws on the past to pay the future. It makes each generation a trustee, not an owner.

Is borrowing then wrong?

No. Ṛṇa, the word for debt in these texts, does not mean a loan. No creditor can call it in, it carries no interest, and it cannot be sold. It is closer to what English means by "I am indebted to my teachers". A government bond is a different thing, and the teaching does not condemn borrowing as such.

What it gives is a test. The texts were not written about government bonds, and I am applying their direction to them. Does a loan pay for something that the people who repay it will also inherit, such as a road, a power grid or a trained workforce? Or does it pay only for what the present consumes? Borrowing that builds is the debt paid forward. Borrowing that consumes is the debt turned backward.

That line is not the accountant's line between capital and current spending. A road to nowhere is capital spending, while child nutrition and health care are current spending that can build for decades. So judge a loan by what it returns, who will repay it, and whether those who inherit it can carry it.

A trustee is not a curator

A trustee is not a museum keeper, though. The best repayment to Pāṇini, the ancient grammarian of Sanskrit, is not to preserve his social world. It is to go on producing knowledge. The best repayment to the builders of an old village tank is to make sure the next generation has water, not to keep the tank unchanged. Each generation owes the next a better inheritance than the one it received, and that includes the right to change it.

Paid into a chain: where it worked, where it failed

The second feature is the object of the debt. The debts are owed to institutions as much as to people. The debt to the seers was paid into a chain of teachers and students, the paramparā, a word that means "one after another". Its worth was measured by what survived in the next link. Modern India often measures its institutions by what they produce while their founders are alive. The paramparā measured what continued after they were gone.

A claim often made for ancient India is that it did not merely create knowledge but built ways to keep it alive in society. On keeping, the chain worked to a degree that still astonishes. The Vedic hymns were carried for thousands of years mostly by memory, through recitation methods learned from childhood and built so that "the sound of each word remains unaltered", in UNESCO's words. UNESCO inscribed the tradition of Vedic chanting on its list of the intangible heritage of humanity in 2008.⁹

On sharing, the same chain failed most of the people it could have served. It admitted students by birth.

One of the old law manuals, the Gautama Dharmasūtra, says that if a śūdra, a man of the labouring class, deliberately listens to a Vedic recitation, his ears shall be filled with molten tin or lac.¹⁰ For most of the subcontinent's history, the debt to the seers was paid by a few, to a few.

Not every Indian chain had that gate. The Buddhist order that lived in Uṣavadāta's cave ordained men without regard to birth. Upāli, a barber, was ordained before the Sakya princes he had served and became its master of monastic law, though most early monks came from higher classes.¹¹ India had many chains of knowledge, in craft families, guilds, monasteries and regional languages, and they differed in whom they admitted. The Vedic chain is one of them.

For that chain, the claim about keeping knowledge alive is half true, and the missing half matters. The Vedic chain was a superb machine for preserving knowledge. It was not built to spread it. A republic's paramparā has to be a chain that anyone may enter. A chain with a gate at the front pays only part of the debt.

Learn and pass on

The teacher's farewell to his graduating students, in the Taittirīya Upaniṣad, puts the debt to knowledge into one line:

svādhyāya-pravacanābhyāṃ na pramaditavyam Do not neglect study and teaching. Taittirīya Upaniṣad 1.11.1 (my translation)

Learning and teaching are named together as one duty.¹² The same farewell also tells the student, bhūtyai na pramaditavyam, do not neglect prosperity. Earning is allowed. It is not where learning ends. The sentence about study does not say learn and then earn. It says learn and pass on.

Will it work after the builder leaves?

That line gives the first working principle of what I call institutional succession. By this I mean the handing on of a capability, its memory and the authority to use it, from one generation to the next, together with the successors' right to change what they receive. The principle is a question to put to every institution.

Will it still work after the person who built it leaves?

Much of modern India's disappointment fits that one question: the fine institute that declines when its founding director retires, the scheme that dies when a minister is moved, the family firm that cannot outlive its patriarch. In each case the capability was real, but it stayed personal, and so it stayed mortal.

Exceptional people can, for a time, make up for ordinary institutions. A country is developed when ordinary people in ordinary institutions reliably produce acceptable results. The institution holds the knowledge, and it limits the damage when someone fails.

Rights, duties and the power to use them

Does being born in debt make a person the servant of society? It need not, and in a republic it must not. India's Constitution names duties as well as rights. Article 51A, added in 1976, lists fundamental duties, among them to develop "the scientific temper" and to protect the natural environment.¹³ Rights keep a society from consuming the person. Duties keep each generation from consuming the society its children will inherit.

A third thing makes either of them real, and that is capability. A right that a person cannot use is only a right on paper. A duty that a person is not equipped to carry out is only a burden. Development needs citizens who can claim what they are owed, who know what they owe, and who have the means to do both.

Part Thirteen — Make, Guard, Grow, Give: Four Duties India Keeps Failing One at a Time

If I had to hand one sentence from India's older texts to every planner of Viksit Bharat, it would come from the first book of the Arthaśāstra. The treatise is attributed to Kauṭilya. Mark McClish and Patrick Olivelle date its original composition to about 100 BCE–100 CE, and a later editor added to it and divided it into its present chapters.¹⁴ It says that daṇḍanīti, the science of government, exists for four things:

alabdha-lābha, to gain what has not yet been gained
labdha-parirakṣaṇa, to protect what has been gained
rakṣita-vivardhana, to increase what has been protected
vṛddhasya tīrthe pratipādana, to bestow what has increased on a worthy recipient, literally "at a ford".¹⁵

Centuries later, and in another language, the Tamil Tirukkuṟaḷ describes the capable king in close to the same terms. Most scholars now date it to around 500 CE, though estimates range from centuries earlier to later.¹⁶ Couplet 385 reads:

iyaṟṟalum īṭṭalum kāttalum kātta / vakuttalum valla taracu A king is he who treasure gains, stores up, defends, / And duly for his kingdom's weal expends. Tirukkuṟaḷ 385, trans. G. U. Pope

In plainer words, a king is one who can create wealth, gather it, guard it, and share out well what has been guarded.¹⁷

Did one text borrow from the other?

No source shows that either text borrowed from the other. Tamil and Sanskrit learning were in contact for centuries, so influence is possible. But a likeness is not proof of borrowing. The value lies in the convergence. Two traditions, in two languages, describe the duty of power toward wealth as a short chain of separate operations, in nearly the same order. The match is close, not exact. Kauṭilya's third verb is growth, while the Kural's second is gathering.

Both are more exact than most modern formulas. They do not say "grow the economy". They name separate operations, each of which can fail on its own, and they hold whoever has power answerable for all of them. In English I will call Kauṭilya's four by short names.

Make, guard, grow, give.

Each verb has its own failure. When making fails, the result is stagnation. When guarding fails, the result is predation. Growing can fail in two directions, as capital that does not multiply at all, or as capital that multiplies only for insiders. When giving fails, the result is clientelism, help handed out to buy loyalty.

Make

Alabdha-lābha means bringing into being what does not yet exist. Kauṭilya's state does not stand aside like a referee. In the second book of the treatise, its superintendents settle new land, build irrigation works, open and run mines, keep workshops and protect trade routes.¹⁸ The same sentence that defines the four purposes says that government secures the gains of the other sciences, among them vārttā, the science of farming, herding and trade.¹⁵ The India of 2047 cannot be built by sharing out what exists now. More must be made.

But "make" in 2047 does not mean what it meant in Kauṭilya's world. What India has not yet gained is mostly not land or mines. It is capability: the process knowledge to make a battery cell or a vaccine at scale, power reliable enough to run three shifts without a diesel generator, and firms that can sell complicated things to demanding buyers abroad.

The old texts describe half of what produces these. They knew where much of the making happened, in the śreṇī, the guild of weavers, oil-pressers, metalworkers or merchants. Guilds were self-governing bodies of producers with their own customs, and the law books told kings to respect them. Manusmṛti tells a king to inquire into the laws of castes, districts, guilds and families before he settles a case.¹⁹ The two weavers' guilds that banked Uṣavadāta's money were śreṇīs of exactly this kind.

The modern Indian cluster is, I think, the closest living likeness to the śreṇī, though it is not its descendant. I mean the knitwear town, the brass town, the diamond town and the pump town, where thousands of small firms bound by trust produce for the world. The likeness holds in their self-regulation, their dependence on trust and their thin use of the state. It ends at scale and technology.

Here the old verb needs new parts. Clusters rarely grow into the large firms that invest in research, and large firms cannot thrive without the clusters that supply them. Neither can do without a public layer that only the state can build: reliable power, testing laboratories, ports, courts that enforce contracts, and universities that train engineers who can actually engineer. A fourth party is usually left out. It is the young worker who arrives in a city with nothing but ability. Alabdha-lābha for 2047 means all four together, and any plan to make should be asked what it does for that worker.

When making unguards

The verbs also limit each other, and their order is more than a sequence. Making can destroy what guarding is meant to protect. A thermal power plant makes electricity and draws down the river that the town below it drinks from. A borewell makes a harvest and drains the water that the neighbour's well was holding. A plan that counts only what is made, and not what the making uses up of what was already held, is not following Kauṭilya. It is following his first verb alone. Every project that makes should also be asked what it unguards.

Guard

Labdha-parirakṣaṇa means protecting what has been made. It is the least glamorous of the four, and the one the others depend on. Wealth that cannot be protected is not wealth. It is a target.

Guarding means security from invasion and crime. It also means what is now called the rule of law: contracts enforced, property secure, and disputes settled in months, not decades. On 23 July 2026 the Law Minister told the Rajya Sabha that the National Judicial Data Grid showed more than 5.6 crore cases pending across the Supreme Court, the High Courts and the district courts.²⁰ A court system in which a business dispute outlives the people who filed it fails at guarding, as surely as an unguarded border. Guarding also needs force, and Part Fifteen takes up the rod.

Guarding has a household face as well. The gold, the plot of land and the fixed deposit kept for a wedding, an illness or old age are guarding at kitchen scale. Inflation wears these savings down, and it falls hardest on savers not rich enough to protect themselves. In 2047, guarding will also mean protecting each citizen's data, which is now both a kind of property and a kind of exposure.

Grow

Rakṣita-vivardhana means making protected wealth multiply. This is investment, capital put to work so that it compounds. On this verb the inheritance left a record precise enough to quote in figures, and the Nāsik deposit is that record.

The arrangement had four parts. A principal was kept intact. There were rules for using it. A guild stood between the donor and the beneficiaries, and the purpose was fixed in writing. Together these separated the life of the donor from the life of the gift. The inscription itself names the instrument akṣaya-nīvī, imperishable capital.¹ The nearest modern word is endowment, but that is an approximate analogy, not a translation. The deposit lived in a world of religious merit and royal patronage, not of trust law. Meera Visvanathan has written a full study of it.²¹

Is the endowment an Indian invention?

No. India did not invent it alone. In Italy, at almost the same time, the Roman writer Pliny the Younger promised his home town, Comum, 500,000 sesterces for the support of free-born boys and girls. To keep the capital safe, he handed a field to the town and took it back charged with a fixed yearly payment of 30,000 sesterces.²² The Indian practice was its own, with guilds as the bankers, and it was cut in stone.

Modern India's public universities, research institutes and hospitals are short of exactly this kind of money, which an economist would call patient capital. Most depend on grants voted year by year, which keep them short-sighted. The endowment itself did not vanish. Temple trusts, religious charities and a few large philanthropic trusts still hold large corpuses. What is rare is its use for public knowledge.

A permanent fund is not automatically good. It can multiply for its trustees instead of its purpose, which is the second way that growing fails. India has a recent measure of how that happens. In 2006 the Sachar Committee looked at the country's registered waqf properties, the Muslim religious endowments, about 4.9 lakh of them. It found they earned about ₹163 crore a year, under 3 per cent of even their book value, and it blamed poor records and weak management among other causes.²³ Any endowment, of any faith, can drift the same way when no one audits it.

Why public institutions use so little of it, I cannot prove. I guess at three causes, without evidence that settles it. Trust and tax law treat a permanent corpus with suspicion. Politics distrusts private money in public purposes. And a yearly grant keeps a lever over an institution that an endowment would remove. A grant renewed each year works like a leash, whether or not anyone means it to.

Give

Vṛddhasya tīrthe pratipādana means bestowing what has grown on a tīrtha. It is the most interesting clause of the four, and the most easily misread. Tīrtha first meant a ford, a crossing place on a river. It later came to mean a place of pilgrimage, and so a worthy recipient. The clause does not say "share equally". It does not say "hoard". It says give what has grown to the place where it will carry someone across.

Uṣavadāta seems to have taken the word almost literally. The same inscription that lists his gifts to Brahmins says he set up free ferries across six rivers of western India.³ Wealth given to a school, a scholar, a hospital, a well, a widow without support or a child without parents takes a life across a river it could not otherwise cross. Wealth scattered over a crowd to buy its vote takes no one anywhere. It is spent on the bank where it was received.

The ford is not the whole theory of giving, and the Arthaśāstra does not pretend it is. The same text lays on the king a flat duty to maintain children without guardians, the old, the sick, the afflicted and the helpless.²⁴ Some people cannot be carried across. They must be held. A modern reading has to separate three things the old texts ran together:

the floor, which keeps every person above a level no one should fall below, whether or not a family holds them
the ford, which builds the capability to cross to where a person can stand alone
investment, which enlarges what the next generation will have.

A floor without fords can trap people where they are. Fords without a floor cannot be used by people who are drowning. A state that gives in order to be needed has misread the clause altogether.

Are election freebies bad?

Some are, and some are not. Do not ask only whether a government gives something away. Ask what problem it solves, who receives it, what capability it builds, what it costs, and whether a better instrument exists. The floor, the ford and investment help with the third question.

A monthly cash transfer to every woman in a state may be a floor. It can reach women whom no other scheme reaches, and it puts money in their own hands. A bicycle for every girl who stays in school is a ford. Bihar gave girls who went on to secondary school a bicycle. Karthik Muralidharan and Nishith Prakash found that the scheme raised girls' age-appropriate enrolment in secondary school by 32 per cent and cut the gender gap by 40 per cent, mostly in villages far from a school.²⁵ It carried many girls across.

Free electricity for farm pumps fails most of those questions. Its benefit follows the pumps, and the pumps belong mostly to larger farmers. A 2017 study by R. S. Ghumman of the Centre for Research in Rural and Industrial Development found that about four in five of Punjab's electric tubewell connections belonged to farmers with five acres or more.²⁶ Many small farmers depend on it too, which is why it cannot simply be switched off.²⁷ But it carries no one anywhere new, and it is the opposite of investment. In Punjab, groundwater was being pumped at about one and a half times its natural recharge by 2013.²⁷

A transfer that reaches the small farmer without paying the large one to drain the water table would, I think, be a better instrument. As it stands, this is giving on the near bank.

The migrant at the ford

The ford matters most for the person the other three verbs tend to miss. That person is the maker who is not yet in any guild, the young migrant in a city with a body, a phone and no plot, no deposit and no uncle in the trade. The migrant has nothing to guard and nothing yet to grow.

For the migrant, the ford is several things together. It is a skill that employers recognise, credit that does not demand land as security, and a record of work that follows the worker from one employer to the next. It is a wage that can be recovered when an employer cheats, and social security that moves with the worker from state to state. It is also a floor beneath them while they cross.

In my own scheme of the aims of life, I add saśaktīkaraṇa, empowerment, to the classical four, and the ford is where wealth turns into it. A Viksit Bharat built only for people who already own something would be development for those who were already provided for.

Every Indian failure has a verb

Make, guard, grow, give. Nothing can be given that has not grown, nothing can grow that has not been guarded, and nothing can be guarded that was never made. Most failures of Indian development can be placed at a single verb. The licence regime failed at making. Slow courts and insecure land titles fail at guarding. Thin investment in research fails at growing one way, and crony lending by public banks fails at it the other way. Giveaways timed to elections fail at giving.

The order is logical, but the duties are owed at the same time, and in India they are owed by different hands. The Constitution gives the Union the income tax, the corporation tax and customs, while police, public health and agriculture belong to the states, and village and town councils sit below both.²⁸ Each hand works to an election clock of five years or less.

Under that clock the four fail together. Making is delayed, because a factory or a laboratory pays off after the next election. Guarding is deferred, because a court reform wins no votes this year. Growing is captured by insiders, and giving happens on the near bank, where voters can see it.

Kauṭilya's list also lacks something a republic must add, which is a way to learn. Every public spend needs a way to find out whether it worked, and a rule for ending what fails.

Part Fourteen — The Bee and the Sun: Who Pays India's Taxes, and Is It Fair?

Every state lives on what it takes from its people. Sanskrit literature thought about the ethics of that taking in two pictures that belong on the wall of every finance ministry.

The first is in the Mahābhārata, among the counsels that the minister Vidura gives King Dhṛtarāṣṭra on a sleepless night:

yathā madhu samādatte rakṣan puṣpāṇi ṣaṭpadaḥ / tadvad arthān manuṣyebhya ādadyād avihiṃsayā As the bee gathers honey while protecting the flowers, so a ruler should take wealth from people without harming them. Mahābhārata 5.34.17, Pune critical edition (my translation)

The bee takes, and that is not in question.²⁹ But a bee that destroys the flower destroys next season's honey.

The poet Kālidāsa supplies the other half. Near the opening of his Raghuvaṃśa, he says of King Dilīpa:

prajānām eva bhūtyarthaṃ sa tābhyo balim agrahīt / sahasraguṇam utsraṣṭum ādatte hi rasaṃ raviḥ Only for his subjects' prosperity did he take taxes from them, as the sun draws up water only to give it back a thousandfold. Kālidāsa, Raghuvaṃśa 1.18 (my translation)

The sun's taking is justified entirely by its giving.³⁰ In this picture a tax is legitimate in proportion to the rain it becomes: roads, courts, schools, clean water and safety. When revenue disappears into waste, theft or display, the taking has lost its reason. People know this even when they cannot say it.

Why do so few Indians pay income tax?

A picture becomes useful only when it is held against a real tax system. India's has several features that the bee would recognise.

About 8.8 crore income-tax returns were filed for assessment year 2025–26, on income earned in 2024–25, by early February 2026.³¹ A return is not a person, and filing is not paying. Some returns come from firms and companies, and many show no tax due.
The latest official split I found is for returns filed up to December 2024. Of about 8.4 crore, about 5.6 crore, two in three, reported no tax payable.³² India had about 97 crore registered voters in 2024.³³ So returns came to fewer than one for every ten voters, and returns that showed any tax to about one for every thirty-five.
A zero-tax return is not evasion. Most are honest returns from people below the line. But the base of people who actually pay is very narrow, and it will narrow further. The 2025 Budget set the income below which no tax is due at ₹12 lakh a year, or ₹12.75 lakh for a salaried employee.³⁴
Much of the economy is informal, and much income is exempt, unrecorded or hidden. The salaried employee, whose tax is deducted before the pay arrives, is the flower the bee lands on every month, because he cannot fly away.
The Goods and Services Tax, which came into force on 1 July 2017, is rain and petal-tearing at once.³⁵ It was a large step toward one national market, though petrol, diesel, crude oil, natural gas and aviation fuel, alcohol for drinking, and electricity still sit outside it or are exempt.³⁶ It left a paper trail that makes evasion harder. It also brought returns, rates and credits that can exhaust a small trader who has no accountant.
Inflation works like a tax that no legislature votes. It does so most when government spending is paid for with newly created money, and it falls hardest on people whose savings are in cash.

Read together, these features describe a bee that takes most from the flowers that cannot move, and least from those that can.

Is GST fair?

The verse cannot answer that with a number, and neither can I. I am not a tax economist, and Vidura's verse cannot set a rate. It gives a direction. A tax system that wears out the small and spares the mobile is tearing petals, whatever its rates.

A Scottish philosopher gave the fairness rule its most quoted form. In 1776 Adam Smith set down as his first maxim of taxation that citizens should contribute "as nearly as possible, in proportion to their respective abilities".³⁷ Smith asks who can bear the weight. Vidura asks whether the flower survives. A fair tax has to pass both tests.

Rain on everyone

Kālidāsa's picture needs one correction before it reaches a republic. The sun returns the water as rain on everyone, not as rain on the field it was drawn from. A tax is not legitimate because each taxpayer gets his own money back in services. It is legitimate because it pays for a public purpose: the court that protects a stranger, the school for someone else's child. A taxpayer who asks only "what do I get for it?" is asking a narrow question. The better one is whether the rain falls at all, and where.

Kauṭilya states the principle under both pictures:

prajāsukhe sukhaṃ rājñaḥ prajānāṃ ca hite hitam / nātmapriyaṃ hitaṃ rājñaḥ prajānāṃ tu priyaṃ hitam In the happiness of the subjects lies the king's happiness, and in their welfare his welfare. What pleases himself is not the king's good. What pleases his subjects is his good. Arthaśāstra 1.19.34 (my translation)

The verse states rājadharma, the duty of the ruler, and it is a teaching of service.³⁸ Power is legitimate because, and to the degree that, it is used for those it governs. Nothing in it requires a king.

Why a republic divides power

The verse moves to a republic with one change. In a republic, power is divided among many offices so that no single person's virtue is needed. A minister, a judge, a collector and a constable are each bound by the verse. Each works within different limits, and each is checked by the others. The verse without that division would bring back the reliance on one good ruler, and Kauṭilya himself did not trust good intentions in the officials who served under that ruler.

Part Fifteen — Every Official Tastes the Honey: How Kauṭilya Designed Government for Temptation

The four verbs of Part Thirteen sit inside a science whose name is daṇḍanīti, "the policy of the rod". Daṇḍa, the rod, means force: punishment, the police, the army.

The rod that guards and the rod that harms

Kauṭilya is blunt about both the need for the rod and its limits.¹⁵ A king with a harsh rod terrifies his people, he writes, and a king with a mild rod is despised. A king who applies the rod as deserved is honoured. A rod used with knowledge joins people to their duties, their wealth and their pleasures. A rod misused in anger or ignorance enrages even the hermits in the forest, let alone householders. And without the rod there is mātsyanyāya, "the law of the fishes":

balīyān abalaṃ hi grasate daṇḍadharābhāve When no one holds the rod, the strong swallow the weak. Arthaśāstra 1.4.14 (my translation)

The rod guards everything the four verbs produce. Courts, the police and the border are guarding in its hardest form. The rod is also where the bee most easily becomes the destroyer of the flower. Think of custodial violence, a case that drags on for years against someone still awaiting trial, or a raid used as a message. In each, force turns on the people it was meant to guard.

One figure carries the pattern. At the end of 2024, by the count of the National Crime Records Bureau, 3,71,440 of India's 5,11,542 prisoners, or 72.6 per cent, were undertrials.³⁹ They were awaiting trial, held before any court had decided the case for which they were held. The share has stayed near three in four for years. At the end of 2022 it was 75.8 per cent.⁴⁰

A rod that holds about three in four of its prisoners before a verdict in their case is no longer applied "as deserved", in Kauṭilya's phrase. It is applied as convenient. A developed state holds a monopoly on force and is visibly, reviewably restrained in using it. The old text states both halves. Most states in history have managed one.

Was Kauṭilya a Machiavelli?

In part, yes, and the case against him should be heard at full strength. The German sociologist Max Weber, in his 1919 lecture "Politics as a Vocation", wrote of the Arthaśāstra: "compared to it, Machiavelli's The Prince is harmless".⁴¹ The Arthaśāstra advises spies, secret agents and quiet killings of the king's enemies.⁴¹ It is not a gentle book.

Yet the same book says the king's good is his subjects' good, and that a rod must be measured to the offence. Both things are true of it. A reader who takes only the spies misses the service, and a reader who takes only the service misses the spies.

Honey on the tongue

What sets Kauṭilya apart from a moralist is what comes next. He does not expect his own teaching to be obeyed. In the second book he writes:

Just as it is impossible not to taste honey or poison placed on the tongue, so it is impossible for one dealing with the king's revenue not to taste at least a little of it. Arthaśāstra 2.9.32 (my rendering)

In the next line he adds that one cannot tell when a fish swimming in water is drinking it, and in the same way one cannot tell when an official is taking money.⁴² In the chapter before, he lists about forty separate ways in which revenue can be embezzled, so that each can be watched for.⁴³ He prescribes audits and graded fines. He has officials moved from one post to another. He rewards an informer with a share of the money recovered, one-sixth in Shamasastry's translation.¹⁸

Both tools cut two ways. Frequent transfers stop an official from building a local racket, but they also wipe out the memory of how a district works. Rewards for informers bring hidden theft to light, and they also invite false complaints.

Engineering, not cynicism

None of this is cynicism. It is engineering. Kauṭilya assumes that the official will be tempted, and he designs for the temptation. He does not build a system that works if people are good. He builds one that works although they are not.

The same idea was reached in a very different place. Defending the American Constitution in 1788, James Madison wrote: "If men were angels, no government would be necessary."⁴⁴ Here the likeness ends. Kauṭilya designed against the greed of the king's servants and trusted the king. Madison designed against the ambition of the rulers themselves.

A ruler who watches his officials is not thereby watched himself, so Kauṭilya's surveillance is not constitutional accountability. A republic adds checks that face upward: Parliament votes the money, courts review the government's acts, an independent auditor examines its accounts, citizens can demand its records, and those who expose wrongdoing must be protected. It needs both designs, which is why it divides power as well as auditing clerks.

Did India follow Kauṭilya?

Not knowingly, but in places it arrived at his design.

Decades of appeals to honesty, and of ideals passed into law without machinery, mostly produced surprise that the ideals were not met.

Where Indian welfare delivery has improved in recent years, it has often converged on Kauṭilya's method, though no one was following him. Direct Benefit Transfer began in a first set of districts on 1 January 2013, and since then more and more entitlements have been paid straight into the bank accounts of the people they are meant for.⁴⁵ Intermediaries are removed, and each payment leaves a digital trail that an auditor can follow. That is traceability. It is not public transparency, because a citizen usually sees only totals, not the records an auditor sees.

Why not remove all discretion with technology?

Because rules cannot foresee every case, and machines fail too. Information is local. Rigid rules applied to a flood or a famine produce absurdities. An official who can do nothing but follow a flowchart cannot help the person the flowchart did not foresee.

Machines also bring their own failures. Jharkhand made ration shops check fingerprints before handing over subsidised grain, and Karthik Muralidharan, Paul Niehaus and Sandip Sukhtankar studied the reforms in large experiments. Leakage fell. But an estimated 1.5 to 2 million legitimate beneficiaries lost access to their benefits at some point, and the authors trace most of the harm to how the change-over was managed.⁴⁶ Removing a human tongue does not remove the honey. It can move it, or spill it.

The mature form of Kauṭilya's design is what I call bounded discretion. An official may use judgment, but must give reasons, keep a record and accept review. The discretion is visible, limited and answerable. Every point where a human being still stands between a citizen and what is due to her, unseen and unreviewed, is a point where honey sits on a tongue. The principle reaches well beyond the revenue department, to procurement, universities and regulators. On digital platforms the honey sits on the tongue of whoever owns the data, and Volume VI takes that up.

Ending — The Guilds Are Gone. The Rock Still Remembers the Deal

The weavers' guilds of Govardhana are gone. No record I have found says when the last robe-money was paid, or when the last monk spent a rainy season in Uṣavadāta's cave. The terms are still on the rock, readable after nearly two thousand years, and the arithmetic still closes at 240.

Kauṭilya knew that design also includes deciding who may hold office at all, and how. On that question the clearest Indian evidence is not in any treatise. It is carved on a temple wall in a Tamil village, where an assembly wrote its election rules in 919 and wrote them differently two years later.

Words to keep

akṣaya-nīvī: "imperishable capital", a fund whose principal is kept and only the income spent, roughly what we now call an endowment.
alabdha-lābha: gaining what has not yet been gained, Kauṭilya's first duty of power, here called make.
daṇḍa: the rod, meaning the state's force: punishment, police and army.
daṇḍanīti: the policy of the rod, Kauṭilya's name for the science of government.
deva: a god, one of the creditors in the Vedic teaching on debt.
kārṣāpaṇa: a silver punch-marked coin used in ancient India.
labdha-parirakṣaṇa: protecting what has been gained, the second duty, here called guard.
mātsyanyāya: the law of the fishes, where the big swallow the small because no one holds the rod.
pañca-mahāyajña: the five great daily offerings of a householder, to knowledge, ancestors, gods, living beings and humans.
paramparā: "one after another", the chain of teachers and students that carries knowledge across generations.
pitṛ: an ancestor.
rājadharma: the duty of the ruler, defined by Kauṭilya as service to the subjects' welfare.
rakṣita-vivardhana: increasing what has been protected, the third duty, here called grow.
ṛṇa: debt, in the Vedic sense of an obligation one is born with, not a loan.
ṛṣi: a seer, one of the composers of the Vedic hymns, owed a debt repaid by study and teaching.
saṅgha: the Buddhist monastic order.
saśaktīkaraṇa: empowerment, which the author adds as a sixth aim of life in his own scheme.
śreṇī: a guild, a self-governing body of producers or merchants.
śūdra: in the old varṇa order, a member of the labouring class.
tīrtha: a ford or crossing place, later a place of pilgrimage and a worthy recipient of a gift.
vārttā: the science of farming, herding and trade.
vṛddhasya tīrthe pratipādana: bestowing what has grown "at a ford", on a worthy recipient, the fourth duty, here called give.
waqf: a Muslim religious or charitable endowment.

Sources

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Kālidāsa, Raghuvaṃśa 1.18. Text: https://gurukul-yu2.pages.dev/text/raghuvamsha ; verse number: https://hemflute.blogspot.com/2011/02/raghu-vamsaha.html
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"Budget 2025: No income tax payable on income up to Rs 12 lakh under new regime", Scroll, 1 February 2025. https://scroll.in/latest/1078634/scroll_in
PTI, "GST comes into force after 17 years of debate", Business Standard, 1 July 2017. https://www.business-standard.com/amp/article/pti-stories/gst-comes-into-force-after-17-years-of-debate-117070100066_1.html
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How this was written

This volume was rebuilt from the fifth revision of the series draft, its Parts One to Three, and revised again after two outside critiques. Every verse, inscription and figure was checked against the sources listed, and each page cited was opened.
Kangle's printed edition could not be opened directly. The Sanskrit of Arthaśāstra 1.4.3 and 1.4.8–14 comes from the GRETIL digitisation of it, and 1.19.34, 2.1.26, 2.8 and 2.9.32–33 are checked through Shamasastry's translation and a university course text. The Nāsik line on registration is a reading of Senart's Prakrit transliteration, because his English translation page breaks off before it.
Some sources remain secondary because I could not open a primary one. The dating of Nahapāna, the dating of the Tirukkuṟaḷ and the caveat on the social origins of early monks rest on Wikipedia summaries of named scholars. The NCRB's 2024 prison report would not open, so its figures come from a press report of the data tabled in Parliament. The court and tax figures come from press reports of written replies in Parliament. The Sachar figures come from a summary. I confirmed that Meera Visvanathan's study of the Nāsik deposit exists, with its title and pages, but could not read it.
The balance-sheet reading of the debts, the floor-ford-investment test, the idea of institutional succession, bounded discretion and the cluster as a likeness of the śreṇī are the author's own constructions, not claims about what the texts meant. So are his framework of six aims of life, the reading of Uṣavadāta's gift as a bid for legitimacy, the three guessed causes for the rarity of endowments, and the account of how electoral clocks make the four duties fail together.
The conclusion would change if strong evidence showed that endowment-funded public institutions in India do worse than grant-funded ones, that free farm power mainly reaches small farmers, or that the old guilds' customs, not the state, carried most making.
No imagined people appear in this volume. Everyone named is a real person or a real record.