5 Dec 2021

Management from ancient and Medieval India n wisdom ..Manu dharma.shastra, Apastambha karika and Yajnavalkya smriti

Manu Dharma Shastra

1. A king's responsibilities include overseeing the loans and mortgages, general sales, genuine ownership of the goods sold (checking the fake ownership), regular payments of salaries to the employees, disputes between employers and employees (a kind of principal-agent analysis). (A2-M1)

2. A king should never collect anything from the public that is not due to him even if he is in a poor state. But he should collect everything, however small that is genuinely due to him, even though he is already rich (Fairness principle). (A2-M2)

3. Having collected the taxes, if a king does not protect his people, he would go to hell. (We have been experiencing the fact that people pay taxes, but no public works of equivalent worth get done.) (A2-M3)

4. Commodity sales should not be out of the stipulated zones, and beyond stipulated times. Sales accounts should not be tampered. Against these crimes, tax would be enhanced eight times. King should monitor incoming/outgoing goods, changes in their volumes, and the extent of sales before levying the taxes. Every five days, otherwise every two weeks, he should check the business pattern. The tools of measurements (such as balances, scales, weights, containers etc.) should be checked every six months. Every day he should check the accounts, transport, mines and the treasury. (A2-M4)

5. Certain services such as crossing canals and rivers should be provided free to certain categories, such as pregnant ladies, ascetics, teachers (only Brahmins in those days) and kids. (This corresponds to our current subsidisation programmes.) (A2-M5)

6. If certain categories of people are unable to find employment, the king himself should employ them and bear their living. (This corresponds to the current employment guarantee programmes.) (A2-M6)

7. If a boat gets submerged due to the fault of the boatman, the boatman should be made to compensate loss of goods, if any. (It is a compensation arrangement to avoid irresponsibility of the service personnel.) (A2-M7)

8. If someone encroaches on the property of another person, the real owner loses the right of ownership if he does not protest within 10 years of encroachment. If someone has been stealthily enjoying others' property, it does not amount to that he is the real owner. (In our times too this is a social malady involving land-grabbing both in rural and urban areas.) (A2-M8)

9. Brahmins and Kshatriyaas should not collect interest for the loans extended by them--unless some special situations force them to do so to keep up ethics. But on such occasions they should keep the interest rate very low. (A2-M9)

Aapstamba Dharma Sutraas

1. Brahmins should generally not indulge in trading. In dire circumstances if it becomes imperative, they may trade in only those commodities which are not prohibited for them. Such prohibited commodities are service personnel, salt, gur, milk and drinks, coloured clothes, perfumes, food, food grains particularly rice and sesame, skins, old cows, gum, seeds, intoxicants, weaponry and fruits of his penance. Not even barter trade is permitted in these commodities. However, bartering in the case of food, personnel, perfumes and education is permitted. (Perhaps implicit in this is that a Brahmin should give away these things without a charge expecting no returns of any sort. However, he may take food for food, servants for servants, and so on. He may teach something to others to learn something else in return.) (A2-A1)

2. Brahmin in exceptional circumstances may sell products such as fruits, provided they are grown in his own orchard and farm. He may even sell firewood. However, he should stop any trading once he gets a job appropriate to him. (A2-A2)

3. A king should impose taxes fairly. He should not collect taxes from traditionalists, sincere devotees, all women, kids, students of residential schools, and servants working in the houses of upper castes, blind, dumb, deaf, sick patients, and ascetics who are unable to get offerings from the public. (A2-A3)

4. Property should not be divided between a husband and his wife. (In ancient times, there were no possession or ownership documents. Yet the concept of ownership of property prevailed which in principle belonged to the head of the household. Since divorce was not approved, the female could never claim alimony or share of the property. Writing up documents (as saasanams, i.e., royal orders) came over later, and much recently the concept of registrations. In India, particularly in rural areas, even now many households don't possess proper documents for the properties they hold, including farms they cultivate and houses they live in). (A2-A4)

5. Knowledge of anything that has not been covered in these sutraas may be obtained by consulting womenfolk of all castes and sticking to the traditions. (It denotes the importance given to the women who are the real carriers of ethical traditions from generation to generation.) (A2-A5)

Yaajnavalkya Smrutee

Mitaaksharaa by Vijnaanesvara in 12th century AD is most notable among commentaries on Yajnavalkya Smrutee and the British judges used to rely on it to interpret and determine the Indian issues in courts.Even recently while interpreting  'animal-driven vehicle' for claiming/granting the state subsidy in Uttar Pradesh, a bench of the Supreme Court took help of the ages-old Mimansa Rules. The Hindu newspaper report (December 18, 2007);

"Mimansa Rules of Interpretation (MRI) were still relevant and could be effectively used in courts whenever there was a difficulty or ambiguity in interpreting a principle or to understand the meaning of a word, the Supreme Court has held.

'It may be mentioned that the MRI were our traditional principles of interpretation laid down by Jaimini whose Sutras were explained by Shabar, Kumarila Bhata, Prabhakar, etc. These Mimansa Principles were regularly used by our great jurists such as Vijnaneshwar (author of Mitakshara), Jimutavahana (author of Dayabhaga), Nanda Pandit (author of Dattak Mimansa) etc. whenever they found any conflict between the various Smritis or any ambiguity or incongruity therein. There is no reason why we cannot use these principles on appropriate occasions,' (a Bench consisting of Justices A K Mathur and Markandey Katju)

'It is a matter of deep regret that Mimansa principles have rarely been used in our law courts. It is nowhere mentioned in our Constitution or any other law that only Maxwell's Principles of Interpretation can be used by the court. We can use any system of interpretation which helps us solve a difficulty. In certain situations Maxwell's principles would be more appropriate, while in other situations the Mimansa principles may be more suitable.

Since we have used a Mimansa principle in this judgment we thought it necessary to briefly mention about the Mimansa principles.' ...." (The Hindu, 18.12.2007)

Yajnavalkya Smrutee: continued:


1. There is a vast chapter called "Runaadaana prakaranam" in this treatise, dealing with loans and the rates of interest to follow according to the risks involved, and who would clear off the debt in case the loanee expires, and so on. Due to space constraints, our discussion is limited to only the following points.

(a) If the loaner with any mischievous intention does not accept the amount (principal and the interest) which the loanee is willing to clear off, the amount may be deposited with an intermediary; and from that day onwards further interest need not be calculated. (A2-Y1a)

(b) If a loan is incurred for maintenance of the family, then as long as the family property is not divided, the head of the household is responsible to clear off the loan. In case the head expires or goes away abroad, then all the shareholders of that person's property become liable. (A2-Y1b)

(c) Unless the loan incurred by either husband or sons is for family maintenance, a female does not become liable to clear it off. Similarly, the father in the case of loans incurred by his sons, and husband in the case of loans incurred by his wife do not become liable. (A2-Y1c)


(Naarada Smrutee that defines four kinds of interest rates: a rate if the interest is cleared on daily basis, another rate if it is monthly repayment, a higher rate which is voluntarily offered by the loanee, and a rate applicable to the already accumulated interest.) (A2-Y1d)

-2. chapter "Asvaamivikraya prakaranam" : If someone finds that a thing of his own was sold away by some other, the real owner can claim it. The person who buys such goods in black market or out of stipulated time (i.e., late in the night) too becomes a culprit in these dealings. The seller should be handed over to appropriate authorities. If the buyer realises that he bought stolen goods, he may himself hand over the goods to the real owner, in case the seller ran away abroad, or too much time elapsed. (A2-Y2)

3. chapter "Kreetaanusaya prakaranam" and "Abhyupetyaa susrushaa prakaranam", issues related to returning the goods once bought to the seller due to bad quality, the accepted percentage losses while making jewelry and other metallic articles, and refusal to carry out a job having accepted to do (principal-agent problem), etc. were discussed. If the agent was forced to become a servant, or he was kidnapped and got sold to the principal by thieves, king should see that the agent is set free. In the present times, this feature corresponds to the problem of bonded labour, child labour and young girls kidnapped for prostitution purposes. (A2-Y3)

4. chapter, "Saahase praasangika prakaranam" deals with the punishments given for cheating in the trade either by fault weighing, measuring or adulteration. Two examples are as follows. If the cheating comes to about one-eighth of the total, a fine of 200 coins, and beyond that pro-rata, should be imposed on the seller. If articles such as medicines, oils, salt, perfumes, paddy, gur are adulterated, a fine of 16 coins should be imposed. (The problem of cheating never gets outdated!) (A2-Y4a)

The chapter also discusses administered prices, price-wars, forming cartels and collusions -which is the most relevant problem of imperfect markets even today. ‘Even after knowing that certain level of price was stipulated by the king, if some of the traders (including artisans) group together and violate that price level, and also if such a group sells the goods at a price that becomes disadvantageous to other traders who are not members of the group, the king should severely punish them’ (A2-Y4b). In case such a cartel plays with their own price setting (raising or lowering) in the face of competition from the goods arrived from abroad, such a cartel should be severely punished. (A2-Y4c)

Though the price is daily stipulated by the king, the king is supposed to set it at profitable level for the traders. ‘In the case of perishable domestic goods the profit rate could be five percent, whereas if the goods are imported the rate could be ten percent. In the case of fixing the price for imported goods, incidental expenses related to bringing the goods from abroad, locally payable taxes, and return travel costs etc. must be taken care of. And the finally set price must be to the advantage of both the sellers and buyers.’ (A2-Y4d)

Due to such sound trade ans peicing policies, trade flourished and it is said that 300 Greek ships a year used to sail between India and Greco-Roman world (consisting of Greece, Italy, Egypt etc. during a few centuries around Christ's birth) amounting to 300,000 tons of annual trade (see http://en.wikipedia.org/wiki/Globalisation).

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