In 1957 Athauda was elected to the Village Council of Othara Gam Dolaha Pattu.
In 1960 he unsuccessfully contested the March 1960 parliamentary election in the Dedigama Electoral District.
At the 1965 parliamentary election he ran in the Ruwanwella Electoral District, representing the Lanka Sama Samaja Party (LSSP), failing by 417 votes although he did win the seat at the subsequent elections in 1970, defeating the sitting member P. C. Imbulana by 2,936 votes.
In June 1999 he was appointed the Chief Minister of Sabaragamuwa Province a position he retained until October 2000.
He served in the ministries of Labor, Youth Affairs, and Mineral Resources Development.