Trade and commerce have been the lifeblood of civilisations for over three millennia. In the machineries that enabled the greatest and earliest societies across Mesopotamia, Egypt. China and India to advance, traders have supplied the lubricant that helped empires run and undertake developmental works. The uncovering of antiquities from Greco-Roman trade in Indus-Valley Culture sites, and the presence of Indian artefacts in bazars and homes in the Mediterranean region and elsewhere show that trade deals are not a construct of the modern age. However, while trade is a continued practice, and forms a component of budgets as we know today, nothing like the modern budget existed before the 19th century, at least not in India where James Wilson presented income and expenditure statements of the colonial government in India in 1860.
A budget (comes from the word bulge or a bag) was certainly not presented in any modern sense. (World Hole Oceanographic institution website)
The naming of budgets
A budget (comes from the word bulge or a bag) was certainly not presented in any modern sense. comes from the French bouge, which in turn derives from the Latin bulga, itself borrowed from the Celtic bolg, meaning a bag or sack. This same root also gave rise to bulge and is closely related to the belly, all carrying the sense of something that holds or swells with contents.
The first use of the term ‘budget’ was recorded in 1733 when the British Prime Minister Robert Walpole presented the financial statement but for the next nearly 100 years the budget comprised mainly a statement of income tax. Napoleon Bonaparte (1769-1821), the French general, is generally accepted as the enabler or the modern financial system and a centralising monetary authority.
Nevertheless, before the emergence of democracies there was a system of accounting for expenditures and income for other forms of rule be it monarchical or oligarchical. Income was generated by the state through various forms of taxes and custom duties, and that’s how the treasury was maintained at healthy levels.
Budgeting in Ancient India
The major categories of tax-based revenues according to the Arthashastra (300 BCE-300 CE) were land revenue (forest produce and horticulture included), customs duties, sales tax, property taxes of various kinds, fines and penalties for myriad kinds of offenses, profits from the commercial undertakings and income from state monopolies in mines and other industries.
However, within the court there was internal accountability about how the king and his ministers maintained the financial health of the kingdom or empire as the case may be. For instance, we have several references from literary works such as the Buddhist Mahavamsa and the Mudrarakshasa by Vishakhadatta about the misrule by the Dhana Nanda that provided the Brahmin teacher Chanakya the conditions necessary to foment a rebellion and install Chandragupta Maurya as the king of Magadh. Dhana-Nanda was known for avarice and indulgences considered extreme.
But we are on more solid ground when it comes to fiscal behaviour for the development of public works under the western satrap Rudradaman I in 150 CE. At Sudarshan lake in present day Junagadh in Gujarat, an extraordinary inscription records the founding, upkeep, and degradation of the man-made lake over a period of 500 year. The lake was built during Mauryan times and fell into disuse in later centuries before it was revamped and repaired substantially in the reign of Rudradaman I. The inscription is remarkable not just because it records a continuity of public works but also from a fiscal perspective because it states clearly that the lake was repaired by the king’s own revenues and not through raising new levies as was usually the case. The inscription says, “Mahakshatrapa Rudradaman, in order to . . .to increase his religious merit and fame, -without oppressing the inhabitants of the towns and country by taxes, forced labour and acts of affection -by (the expenditure of) a vast amount of money from his own treasury and in not too long a time made the dam three times as strong in breadth and length . . . [on] all [banks] . . .. (and so) had (this lake) made (even) more beautiful to look at”.
Turushka- Danda: A mystery tax by Gahadavalas
Dharmashastras like the Manusmriti, Yajnavalkyasmriti talk at length about how a king must use taxation as a means of raising revenues for the functioning of the state. They also advise that the rates of taxation especially on merchants and traders should be decided on a scientific basis i.e on precise data on actual earnings instead of arbitrariness.
They also sanction raising of taxes to meet special needs such as for public works or towards war campaigns and other similar needs of the state. This Shastric sanction has often meant that taxes were raised, until even recent times like the 18th- 19th century for adhoc and oppressive reasons. For instance, in 19th-20th century Awad, landlords not satisfied with illegal nazranas and taxes, often demanded additional cesses in the name of buying new cars, elephants, horses and even gramophones. The peasant had been reduced to a wish-fulfilling beast for the talukdars, who also collected taxes in the name of certain holy days and festivals. An instance was recorded of a landlord collecting ‘dust-tax’ for having to traverse dusty roads while touring his estates!
An enigmatic penal tax raised during the 11 century by the relatively short-lived Gahadavala dynasty of Kannauj-Kashi (1080s-1220 CE). Several inscriptions belonging to their monarchs mention the Turushka-danda as a form of tax. The inscriptions themselves issued land to record land grants made to Brahmins. As part of these proclamations the inscriptions record this tax which continues to baffle scholars. Was it a form of tax levied to raise an army to protect the kingdom and its key cities from Ghaznavid raids or was it a penal tax imposed on prisoners taken from their battles with Ghaznavid armies? This remains inconclusive with historians and scholars differing on its exact nature, some even suggesting that it was a tax on an aromatic reed! However, given that the last recorded inscription mentioning this tax dates to 1168 CE during the reign of Jayachandra Gahadavala, the penultimate king of this dynasty.
(HistoriCity is a column by author Valay Singh that narrates the story of a city that is in the news, by going back to its documented history, mythology and archaeological digs. The views expressed are personal.)
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