The paper focus upon Kautilya’s ideas of administration of state, where corruption play’s an important role in the State’s economic system. In the Arthashastra, Kauï‚ilya has prescribed the measures to prevent the corruption and punish the offenders. He has presented an example that, just as fish moving inside the water cannot be known, when it is drinking the water, in the same way, officers appointed for the carrying out the works of state cannot be known when they are embezzling the money. The paper describes the relevance of Kautilya’s ideas of preventing corruption in modern political environment.