Economic Regulations, Competition, and Consumer Protection in Ancient India

Abstract

The ancient Indian texts, mainly Manusmriti and Arthashastra, not only paint a vivid picture of flourishing trade and commerce in ancient India, but also provide detailed account of various regulations that were in force to tackle foul play in the markets. It is learned that the Ancient India was a “mixed economy” adhering to the socio-economic philosophy of a “welfare state”. The reliance on market forces to deliver social goods was less. In general, the state was both regulator and competitor, including state enjoying monopoly over certain sectors, such as mines and mineral. This article is divided into four parts. The first part introduces the audience to the ancient Indian ethos, where dharma (duty) was the backbone of the civilisation that made the society righteous and duty-centred. The second part gives an overview of ancient India’s economic activities along with a short account of sectoral regulations. The covered sectors are: mines and minerals, agriculture, industry, forest produce, liquor, trade and commerce, transport and communication, finance, and justice administration. The third part presents a competition analysis of the then regulations. It analysed the state monopolies, state as regulator and competitor, the prevalence of the guild system, differential regulatory treatments, price control, treatment of cartels and consumer protection. The fourth part is the conclusion.