In this article we will discuss about:- 1. Economic Background of Epic Age 2. State Policy during Epic Age 3. Merchant’s Organization.

Economic Background of Epic Age:

The Epic age in India is named so because some of the greatest epics came into being during this time. The epic period is estimated to be roughly from 1000 to 600 B.C. The ancient Indian society is described in a very vivid manner in these three epics. The two famous Indian epics that were created during this time were the Ramayana and Mahabharata. The very ideology of Hinduism is based on these epics.

The Mahabharata is a foundation of the religion that is thriving today. We get a clear picture of the kind of life people led during that point of time. According to the evidences found in the epics, the society was basically rural in nature.

People remained prepared for any attacks or external aggressions by keeping weapons with them. The rulers were not chosen but were hereditary. The main economic activity was agriculture and small scale industries like arts, handicrafts, pottery, etc. thrived.


The epics tell us about the way the society was ruled at that time. The King basically filled his treasure vault with the taxes collected from people. He was the highest authority who had the power to punish and pardon.

The priests were given the task of performing the religious rituals and sacrifices to make sure that no evil forces hampered the kingdom. With time, the priests began to gain power and also started to influence the king. The king listened to them because the priests were highly learned people who were supposed to be the voice of Gods.

The warriors were trained in using weapons and were supposed to be the protectors of the palaces. Though caste system was there, it was not too rigid. A warrior or an out caste could become a priest if he was adopted by one.

The most respected and feared of all were the Dravidians who could not be questioned and were unaffected by the society. The most popular recreational activity was gambling. Horse racing, hunting, gambling, etc. were all introduced during the Epic Age in India.

State Policy during Epic Age:


The idea is that a gardener waters the plants daily, weeds them, adds nourishment in the form of manure, and guards them carefully. As a result he is rewarded with flower and fruits year after year. On the other hand, a charcoal-burner cuts down the tree and burns the wood, thereby getting only one supply of charcoal. Similarly if a king overtaxes his people, he may gain temporarily, but will ruin agriculture, trade, and commerce.

By fostering their growth, he will benefit permanently. Bhisma says to Yudhisthira that a king’s income (vetana, lit. salary) is derived from bali-sastha, that is one- sixth of the crops as revenue, sulka (various taxes) and fines realised from offenders (12.72.10). We have already dealt with bali and are not here concerned with the fines. It is, however, necessary to discuss the nature and incidence of sulka.

In this connection Bhisma says that a man who daily attends to his cow enjoys her milk; similarly a king who looks after his subjects gains his objects (12.72.17) and then adds- ‘O king, be like a gardener, and not like a charcoal-burner, and thus you would be able to enjoy your kingdom for a long time.’ (12.72.20)

The principle of taxation was based what may be called the theory of gradualness. As Bhisma said to Yudhisthira (12.89.5.-13). ‘O king, one should drink the state (i.e. collect taxes) [as imperceptibly] as a leech [sucks the blood], or as a tigress, which carries her child without biting or letting it fall.


Just as a rat gnaws at the foot of a sleeping man so softly that the man merely shakes his legs slightly, so should a state be taxed (lit. drunk). [The king] should increase his prosperity by making [the subjects] give little by little.

Then he should increase [the tax]-gradually but certainly. Just as a young bull’s load is frequently increased by very small measures [so do you begin to tax lightly and increase the taxes gradually,] without drawing the hooso [through the bull’s nose] too lightly.

Once the noose is properly fastened (i.e. the bull is under control) it cannot become violently disposed; thus should the bull be trained to carry the full load. It is difficult for a king to control everybody, so he should propitiate the leaders and enjoy (i.e. collect taxes) from the ordinary men.

Thereafter, by creating a division between the two groups, mutually staring at each other, the king can, at his pleasure, effortlessly enjoy (i.e. collect taxes from) all persons by consoling them. The king should not impose taxes on them at the wrong place and at the wrong time. [The king should collect taxes] in proper time, in proper manner, mildly, and in due order. Bhisma again says (12.88. 17-20)- A wise man should [collect taxes] from the state on the analogy of cows.

O Yudhisthira, the calf of an under milked cow is stronger and capable of carrying heavier load than the calf of an over-milked cow. Similarly a state is impoverished by over taxation. The king who treats his state with kindness and maintains himself within his income achieves great result’.

Manu (7.129) also recommends that a king should collect taxes as gradually as a leech sucks blood, a calf drinks milk, or a bee collects honey. The purport of this recommendation is, as Kulluka explains, that the king should not destroy the capital (muladhanam anucchindata), but collect the taxes gradually in installments.

This was a shrewd but practical principle of taxation, which was not inimical to the development of trade and industry. As the quantum of tax depended upon the prosperity of trade and industry, the kings were advised to foster them carefully, for, the yield of revenue from taxes on trade and commerce was only next to land- revenue. And while the land-revenue was more or less fixed and depended on the vagaries of the season, these taxes or sulka provided the kings with an ever-growing source of income.

Narada’s advice to Yudhisthira was (2.5. 103-07)- “I hope that foreign merchants are made to pay taxes (sulka) by your officers. I hope that the merchants bringing merchandise are not cheated or insulted by your officers… I hope that you are providing the craftsmen (silpins) capital (dravya) and accessories (upakarana) sufficient to last for four months”.

Narada’s advice partly agrees with Kautilya’s direction to the Director of Trade (2.16.11-13). “He should encourage the import of goods produced in foreign lands by [allowing] concessions. And to those [who bring such goods] in ships or caravans, he should grant exemptions [from taxes] that would enable a profit [to be made by them]. And no law-suit in money matters [should be allowed] against foreign traders, except as are members [of native concerns] and [their] associates”.

Providing the craftsmen with capital and implements was intended for supporting the industry. It is possible that here is the origin of the state-owned factories described by Kautilya. The gomins (cow­herds) have’ already been described above. They also had to pay tax, and the king is advised to look after their interest and support them by all possible means (12.88.35).

Regarding the mode of taxation, it is stated- ‘Merchants should be made to pay taxes after taking into consideration the sale price, the purchase price, transport charges, cost of barley-meal, rice and other eatables like pulses, vegetables, ghi etc. [for laboures] and the charges paid to the guards for affording protection during transit.

‘Craftsmen’ should be made to pay taxes after taking into consideration their utpattim, that is, their mode of production [including the cost of raw materials], dana-vrtti, that is, their method of distribution of income [including wages paid to labourers] sil-pam, that is, quality of the produced goods, and silpa-pratikaran, that is, taxes per piece of goods produced or taxes in kind.

Several parallel passages from the Mbh and Manu have been quoted above. Which of these two is the borrower has engaged the attention of scholars for a long time. Discussion of this problem here will be a digression, hence it is being avoided. Still it play be suggested that many floating verses were held to be authoritative, which were incorporated both in the Mbh and Manu. Kautilya’s regulations do not contain the provisions of Manu and the Mbh.

However, he lays down (4.2.36)- ‘In the case of commodities coming from a distance, the expert in fixing prices (Director of Trade) shall fix the price after calculating the investment, the production of goods [i.e. the quality and the quantity], duty [in transit] interest, rent, and other expenses’.

Thus it will be evident, that taxation was not intended to be a general impost neither was it an ad valorem duty; efforts were made to ascertain the profit which alone was taxable. It has to be concluded that if the sale of his products did not yield a profit, the merchant did not have to pay any tax. It was more in the nature of income or profit tax than excise or import duty. The provision regarding the supply of capital and implements to craftsmen (2.5.107) is peculiar to the Mbh.

Evidently the measure recommended by Narada would have encouraged production, and may have developed into the idea of the state owned factories described by Kautilya. It may be recalled that Yudhisthira was advised by Narada also to grant loans on easy terms to cultivators. Probably the same kind of assistance to craftsmen was intended. Such loans would have rendered the peasants and the craftsmen free from having to rely on the usurers.

Almost the first act of the Pandavas on receiving their patrimony from Dhrtarastra was to ‘measure’ out adequate land for their new capital (1.199.29). Many traders from different countries speaking many languages (1.199.29) as well as all kinds of craftsman (sarva- silpa-vidah) came to the new city and settled there (1.199.38).

Evidently the Pandavas took adequate measures to attract trade and industry to their new capital, and if it can be identified with a place near Delhi, then a part of the commerce that flowed along the Ganges may be presumed to have been diverted through the Yamuna.

If Hastinapura was located near Meerut, then it possibly lost part of its commercial importance due to the rise of the new Pandava capital of Indraprastha. Even the king’s pleasure was not without economic significance. Explaining the real import of hunting, Ramacandra said to Laksmana- ‘Kings go for hunting expeditions for meat and for pleasure.

But duo to this exertion they come across much wealth, various metals, gems and gold. Wealth thus acquired augments the treasury’ (3.41.29-31). No Avenue for gain was neglected by the kings, and one may be sure that their subjects followed the same principle.

Merchant’s Organization during Epic Age:

The epics speak of several organized groups of which the most interesting is the vadhu-nataka-sangha of the Ram (1.5.12), explained as theatrical groups composed entirely of women. Ayodhya is said to have several such groups. The Ram, mentions both nigama and sreni. In 2.13.2,  it is related that the amatya (ministers), bala- mukhyah (commanders of the army) and mukhya ye nigamasya ca (heads of nigamas) came to attend Ramachandra’s abhiseka.

This statement is practically repeated a few verses later (2.13.19). While describing the arrangements made for Ramacandra’s reception at Ayodhya after the war, it is said (6.115.13) that Bharata was accompanied with brahmana-mukhyas, and sreni-mukhyas with the nigamas. The words sreni and nigama are synonymous, both meaning ‘guild’. Here it is meant that the ‘heads of the guilds were present with the members of the guild’.

During Ramacandra’s coronation, scented water was poured on him by the persons noted below in the following order- rtvij brahmanas, sixteen maidens, ministers, soldiers, and nigamas. Naigamas are again mentioned (7.82.17-18) along with general public (bala-vrddhams=ca), brahmanas, clever artisans (karmantikas=ca kusalan) and learned craftsmen (silpinas = ca supanditan).

After Ramacandra’s departure for the forest, Dasaratha died, and Bharata returned to Ayodhya from Kekaya. A fortnight after his return, he was told that, having collected all the parapharnelia for anointing him his svajana (relatives, ministers etc.) and the srenis were waiting for him (2.73.4). Bharata refused to be crowned, and left with a huge retinue and citizens for the forest to induce Ramacandra to return.

There Vasistha addressing Ramacandra said- ‘Here is your parisads (councillors), srenis and nrpas (chieftains)’ (2.103.5). This grouping indicates that the srenis had a distinct political status. In the Mbh the srenis do not seem to have been given the same importance as in the Ram. However, their importance can be deduced from one episode. After Duryodhana and the Kauravas were captured by the gandharva Citrasena, they were released by the exiled Pandavas.

But Duryodhana felt so humiliated that he decided to give up his throne, and while declaring his decision to his brothers said- ‘What reply shall I give when asked by Bhisma, Drona, Krpa, Asvatthaman, Vidura, Sanjaya, Bahlika, son of Somadatta, other elderly persons, brahmanas, sreni-mukhyas and others. (3.238.14-15)

Duryodhana’s reference to the sreni-mukhyas shows that they had some importance, but the absence of any other reference to them indicate a general decline in their position. This may have been due to the policy adopted by the kings during the age of the Mbh. As Bhisma advised Yudhisthira- ‘Protect the ministers from the intrigues (upajapa, lit. acts of rebellion cf. Manu, 9.275) of sreni-mukhyas, and from supplications by friends, [the sreni-mukhyas] should neither be permitted to quarrel among themselves [bhedo] nor be allowed to present a united front.’

Vallabha means a favourite, but in the present context it seems to indicate, a friend of the sreni- mukhyas, for the Ram (2.98.71) speaks of naigama-yutha-vallabhah (friends of the bands of naigamas). Probably the king is being asked to pay no heed to the entreaties of the friends of the rebellious or intriguing sreni-mukhyas, when the ministers recommended their punishment. One can, therefore, be certain that nigama in the epic meant an association of traders, and craftsmen.

The Mitaksara on Yajnvalkya (1.361) explains sreni as a guild of betel-sellers. But Yajnavalkya mentions other guilds such as pugas, ganas etc. which are not mentioned in the epics. However, the Mitaksara on Yajnavalkya 2.30 explains that puga is an association of different castes and different avocations that stay in one locality, while the sreni is a group of people of different castes, that subsist by the occupation of one caste, and give hedavukas (horse-dealers), tambulikas (betel-leaf sellers or growers), kuvindas (weavers), and carmakaras (leather-workers, shoe-makers) as examples of srenis.

These examples, however, are of craft-guilds, but the Vyavahara- matrka of Jimutavahana states that the sreni is an association of artisans or traders. Hence, as stated above, it is evident that, sreni and nigama in the epics meant any association of traders and craftsmen, and that the later subdivision into puga etc., were unknown in the epic age. Manu mentioned pasanda-gana-dharma in 1.118, and sreni-dharma in 8.41.

Now, Katyayana has explained sangha as ‘a body of Bauddhas or Jainas’, and by analogy, pasanda-gana may mean ‘a body of heretics’. But Medhatithi has explained gana as ‘a union of vanik-karu-kusilavas (traders, artisans, and actors) while Kulluka merely says vanikadinam samuhah (union of traders etc.). But commenting on Manu 8.2, Medhatithi explains sreni as ‘traders etc. who follow the same trade’ and gana as builders of dwellings and mathas and brahmanas residing in mathas.

Commenting on Manu 8.41, Medhatithi explains sreni as eka-karyapanna (those engaged in the same trade or professions) and as examples cites vanik-karu-kuslda-caturik-adayah (traders, artisans, money-lenders, charioters etc.). Kulluka, in the same context, explains sreni as vanikadi (traders etc.).

It is evident, however, that even if Manu had used gana in 1.118 in the sense as understood by Medhatithi, there was hardly any difference between gana and sreni, and that the terms indicated unions or guilds of craftsmen or merchants.

The words sreni and nigama have been used in the epics, like gana and sreni of Manu, in a broad sense. The head of each sreni was called a sreni-mukhya, and apparently they enjoyed some status. It is, however, likely that due to the policy advocated by the Mbh (12.138.63) as explained above, a division was deliberately created among various unions or guilds, and different guilds were given different names as mentioned by Yajnavalkya, Katyayana and others.

Thus instead of several srenis, there arose, pugas, vratas, ganas, etc. which would have had the effect of destroying the cohesion of the sreni-mukhyas, and thereby lower their status and weaken them.

The Mbh (12.37.14), however, declares- ‘There can be no penance for one who has given up the, duty of his caste, sreni, locality, and family’. The dharma of jati etc. here has a wide connotation. Manu says (8.41)- ‘The king should establish law [dharma] after ascertaining the customs [dharma] of caste, janapada (country), sreni and kula [family], Adhivasa of Mbh (12.37.14) which we have rendered as ‘locality’ seems to stand for janapada of Manu. Gautama (11.21) says- ‘Cultivators, traders, herdsmen, money-lenders and artisans have authority to lay down regulations for their respective classes’.

Yajnavalkya (1.30) and Narada (1.7) state that law-suits may be decided by village-councils (kulani) guilds (sreni), assemblies (puga in Yajnavalkya and gana in Narada), the judges appointed by the king and by the king himself, in succeeding scale of superiority.

According to Brhaspati, ‘the heads of kula (families), sreni (guilds), ganas and the inhabitants of towns (pura) and forts (durga) may pronounce the two punishments of reprimand and condemnation against wrong-doers and may also excommunicate them, and the punishment and favours declared by them according to rules should be approved by the king, since such power is regarded by the sages as delegated, to them’.

Elsewhere Brhaspati states ‘that the kulas, srenis and ganas that are well-known to the king may decide the disputes of litigants except those that fall under sahasa (crime involving force) and that it was only the king who could carry out the order for fines or corporal punishments, i.e. the arbitration courts could only decide disputes not involving sahasa and they had no power to execute their decrees about fines and corporal punishments, but that their decisions had to be filed with the king, who, if he did not disapprove of them, put them into execution’.

Brhaspati further states that ‘in disputes among husbandmen, craftsmen (carpenters and the like), artisans (like painters), money- tenders, guilds, dancers, sectarians (like Pasupatas) and criminal tribes the decision should be made with the help of those who understand that conventions made by them and their usages’.

Whether these regulations had the force of law in the epic age may be questioned. But the statement in the Mbh (12.37.14) illustrates the rigour of sreni-dharma of that age, which taken together with Gautama (11.21) and Manu (8.41) positively indicate the mandatory nature of the customs obtaining in a guild. The traditions established in the epic age shall have been accepted as customary law by later Dharmasastra writers.