Economics trend and analysis
The economy plays a very significant part in the preparation of UPSC. In fact, economics, along with history, geography and polity forms one of the four pillars of the IAS prelims exam. The economy is a fascinating subject and as forthcoming administrators, UPSC aspirants need to possess a quite good understanding of the basic principles of economics. What makes a country run, how its finances are governed, the basic terms and definitions continually in news, basic banking operations, budget, etc. are topics that have to be read about.
The chart given below gives you an idea about the importance of this subject in exams:
By this graph, we conclude that:
1) every year around 15 marks question will ask in preliminary questions.
2) approximately 6-7 questions asked every year in exam.
* Prelims Economics Syllabus for UPSC
– Economic and Social Development:
Sustainable development, poverty, inclusion, demographics, social sector initiatives, etc. Here, you must cover topics such as economic growth and development, finance, banking, budget, the balance of payments, poverty and related issues, population composition and related characteristics, social sector initiatives related to education, health and sanitation, and international financial institutions.
– Economic growth and development:
Basic concept and definition of economy and economics, and transfer of resources, distributive effects, macro and microeconomic policy, micro-macro balance, the distributive impact of economic policies, development versus growth, determinant of growth and development, concepts such as HPI/MPI, HDI, PQLI, GEM, GDI/GII, TAI, Green index, sustainable development, India’s ranking in the various indices.
Definitions, causes, distribution-deprivation, income versus calories, measurement of poverty, the status of poverty, eradication programmes, poverty and resource policy, tribal rights and issues, livelihood mission.
Definition, relevance, types, financial inclusion, recent initiatives.
Census data, populations by gender, by state, by age group, socio-economic status, caste, religion, literacy levels, etc. Trends in human development – interstate comparison, etc.
– Fiscal policy:
Definition, component, receipts, revenue and capital account, tax revenue, expenditure, budget.
– Social issues:
Financing health policy, education policy, sanitation, drinking water, social security, infrastructure policy, international trade issues, regional cooperation.
Also, focus on issues currently in news related to the above topics – MNERGS, MSMEs, Make in India, industrial corridors, NITI Ayog, black money, international treaties and organisations, India’s policies with neighbours.
Mains Economics Syllabus for UPSC
GS Paper 3 Economics
(Economic and Social Development-Sustainable, Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.)
UPSC Economics syllabus for mains is included in the General Studies Paper III which contains a topic Economic Indian Economy and issues relating to planning, mobilization of resources, development, growth and employment.
* Major cropping patterns in different parts of the country, different types of irrigation, transport and marketing of agricultural produce and issues and associated constraints; e-technology for
* Direct and indirect farm subsidies and minimum support prices; PDS- objectives, functioning, limitations; issues of buffer stocks, food security; economics of animal-rearing, Technology missions.
* Food processing and related industries
* Land reforms
* Effects of liberalisation
* Infrastructure: energy, roads, ports, airports and railways
* Investment models
IMPORTANT TOPICS TO FOCUS ON:
# Features of Indian Economy
A division of economic activities, poverty, unemployment, HDR, measures to eradicate poverty
# Basic Economic Indicators
National income, price index, production, population, foreign trade
Growth, census, consumption pattern (energy)
# National income
Concepts, methods of calculation
Crops, seasons, agricultural credit agencies, Kisan Credit agencies, land reforms, insurance, green, white, blue, yellow revolutions, irrigation
Industrial policies (1948, 1956, 1991), small scale industries, key industries, industrial sickness, the different committees, disinvestment, PSU policy, industrial finance
# Foreign trade
Composition, direction, EXIM policy, WTO, the balance of payments, measures to improve foreign trade
# Money and banking
Money market, credit control (different rates), commercial banks, cooperative banks, NBFCs, committees, SEBI, stock market developments, the insurance industry, new banking sector reforms, money supply measures, inflation, deflation
# International organisations
# Planning commission
# Public finance
Finance commission, taxation, deficit financing, public spending and debt
Strategy to cover Economy Syllabus For UPSC
The economy of any country serves as the foundation for its growth and development. As a potential member of the bureaucracy, it is important to have a sound understanding of how the Indian economy works. The GS III paper in UPSC CSE Mains assesses the candidate’s knowledge in this regard. Indian economy is also included in the General Studies Paper in Prelims wherein the major focus is on the budget allocation and recently launched schemes. Here are some tips that may be useful for preparing the economy syllabus for UPSC:
– Start with NCERTs:
It is important to have a strong understanding of key concepts of economy. NCERTs are the best resource to cater to that need. Moreover, questions are asked directly from the NCERT. Hence, it is important to read them carefully.
– Read IGNOU/NIOS notes:
After you’re done with NCERTs, supplement your knowledge by reading IGNOU/NIOS notes. You do not need to read them cover to cover, just read through the relevant chapters that are a part of the UPSC economy syllabus.
-Cover Previous Year Questions:
Next, it is important to glance through previous year question papers to get a clear understanding of the type of questions that are asked in the exam.
– Cover Basic Books:
Next, you need to cover the basic books like Indian Economy by Ramesh Singh and Indian Economy Key Concepts by Shankar Ganesh. These books are specifically written for CSE preparation, hence are very helpful in covering the entire syllabus very strategically.
– Current Affairs:
Current affairs play a very important role especially for the economy subject as it covers the recent developments in the Indian economy. Read “Economic Times” and “Business Standard” to cover the current affairs of economy portion for UPSC preparation.
– Solve Mock Test:
Mock tests are an extremely important element of UPSC preparation. Solve as many mock tests as you can, analyze your mistakes, amend them and repeat this process.
Booklist for Preparing Economy syllabus for UPSC
– NCERTs (Class X, XI, and XII)
– Indian Economy by Ramesh Singh.
– Indian Economy: Performance and Policies By Uma Kapila.
– Indian Economy Key Concepts by Sankarganesh Karuppiah
– NIOS Notes and IGNOU notes
– Some of the additional resources include The Hindu and Economic Times newspaper along with government publications like Yojna, Kurukshetra, and India Year Book.
Analysis of Economics
– An average number of questions asked in the last 5 years is 16 and almost every question is solvable with decent knowledge and logic.
– Topics and even questions are repeated year after year
– Even when you don’t know all the options, often answer with option is clearly visible<importance of reading all the options>
– UPSC is not fond of statistics. So you don’t need to know if India’s growth rate is 7.6% or 7.9%, the savings rate is 32% or 35%, inflation is 5% or 7% of what is India’s GDP etc.
– Knowing about the broad trends is very imp… For instance – the direction of GDP growth <is it increasing or slowing down>, inflation etc.
– Every year 6 – 7 questions are from basics of National income accounting, Inflation -deflation, Monetary Policy, Fiscal policy, taxes, CAD, fiscal deficit, BOP etc. For solving such questions, understanding this collection – economics concepts simplified is very very important
– UPSC doesn’t ask very intricate details / basic understanding would be enough. For instance – it does not even ask whether govt securities are used as collateral in the repo but not in bank rate or for instance a user asked today, During an OMO, who all are eligible to purchase Govt. Securities?
– Obviously Banks. Are other FI allowed to purchase G-Secs? These questions are not asked. Go after them, only after you are confident of solving with >80% accuracy basic questions of all the subjects.
– From international organizations, again very superficial things are asked but you need to know them, otherwise, you won’t be able to solve the questions. For instance – which organization publishes which report? basic agreements or treaties, headquarters etc.
This is all about Economics in UPSC…
All the very best..