The Vyavaharika state refers to the dual (Dwaita) state of reference. Most people understand the universe from this plane. They perceive the duality of object and the subject. There is the world (jagat) and there is the individual (jiva) and the God (Ishwara) all separate. The Paramarthika state refers to the absolute non-dual (Advaita) state of reference, where only Brahman/Atman is. There is no difference between the God, the individual and the world. The former is a temporary and relative state of existence whereas the latter is the absolute-permanent state of existence.
Sage Yajnavalkya while discussing with his wife Maitreyi about the nature of this cosmos says: “Where the duality is present, there one can smell the fragrance, one can speak to others, one can listen to others, one will pay respect to others, and one can think and understand. But, where there is only atman everywhere, what will he smell? Whom will he ask? What will he listen to? Whom will he pay respect to? What will he think about and understand?”
The first part of the address refers to the Vyavaharika state. Here, the God, the man and the world are separate things. God is the creator of the world. The individual is the worshipper and the God is the worshipped. The man is the subject and the world is the object. Hence, the man experiences the sensory objects. He can see, hear, taste, smell and feel the touch. He is subject to both the pains and pleasures of the sensory world. The second part of the Yajnavalkya’s address beautifully captures the essence of Paramartika state. In the absolute state of non-duality, no question of a second arises. When the object and subject have merged together, what remains to be perceived? The knower and the known have become one in this state. “Yatrat vasya sarvamat maiva bhut”—where only atman pervades everything, there is no creature and no creation. The Brhad Aranyaka Upanishad says: “There exists nothing else anywhere (other than Brahman).” In this state there is neither pains nor pleasures, only bliss exists. But only a theoretical understanding of this concept of two realities will lead to blind faith and false ego.