The Second urbanization was predicated on the agricultural surplus, proliferation of art & craft, and expansion of trade & commerce. Various artisan groups organized into corporate structures with internal governance structures. As the urbanization continued and spread to new areas; guilds also proliferated; as their literary and archeological references increased. Such references declined in North India after the Gupta age in general, but they continued in the South as part of the continuous urbanization process.
Second urbanization was predicated on craft specialization. In an urban setup, people practicing the same trades can live closer together. Gradually, a governance structure (guilds) comes up based on the economic differentiation in the same caste-trade group. Punch marked silver coins during the Mahajanpad era were issued by guilds. Shrenibal, shreninyayalaya, shrenidharma, etc. are mentioned in the literature. Gautama Dharmasutra says, “Kings should legislate after consulting the corporate group representing that couriers of the long-distance trade were organized into guilds under the sultanate.
In the post-Mauryan period, urbanization spread to Deccan and deep South and so did the organized corporate activities. Jataka stories refer to as many as 18 guilds. Guilds are also mentioned in the inscriptions in Deccan and Sangam country; the donations for religious and public works being the most common theme e.g. Mandasor inscription. Seals and sealings – bearing the nouns such as nigama, nigamasya etc. have been found from Taxila, Ahhichhatra, etc.
This process continued during the Gupta age. Brihaspati Smriti says that kings should respect the decisions made by the guilds. Also, guilds took part in the district level administration and seals mention joint corporate bodies of merchant-bankers. Later, such literary and inscriptional references to the guilds dropped in the Ganga valley, but in the South, the hypothesis of urban decay doesn’t hold and corporate groups- Nagarams– are also mentioned recurrently.
Thus, the organized corporate activities flourished and expanded on account of the emergence and proliferation of urbanization; and it also lost some strength in the post-Gupta period.