Economics is a popular optional subject among the candidates as it is included in all stages of the IAS exam. UPSC Economics syllabus is an important part of UPSC Mains and UPSC Prelims exam. It is one of the optional subjects in the UPSC syllabus. You can find the syllabus in the General Studies 3 paper of the UPSC Mains exam. Economics-related questions in the UPSC exam cover recent developments, trade, agriculture, transportation and more.
UPSC Economics Syllabus for Prelims
UPSC Economics syllabus for Prelims covers many important topics like economics, social development, poverty, sustainable development, demography, social sector initiatives and much more.
Economic Growth and Development
- Basic concept and definition of economy and economics
- Use and transfer of resources, distributional effects
- Macro and microeconomic policy
- Micro macro balance
- Distributional impact of economic policies
- Development vs growth
- Determinants of growth and development, concepts like HPI/MPI, HDI, PQLI, GEM, GDI/GII, TAI
- Green Index
- Continuous development
- Ranking of India in various indices.
Poverty
- Definitions
- Reason
- Lack of distribution
- Income vs Calories
- Measure of Poverty
- State of Poverty
- Eradication Program
- Poverty and resource policy
- Tribal rights and issues
- Livelihood Mission
Inclusion
- Definition
- Relevance
- Type
- Financial inclusion
- Recent Initiatives
Demography
- Census Data
- Population by gender, state, age group, socio-economic status, caste, religion, literacy level etc.
- Trends in Human Development – Interstate Comparison, etc.
Treasury Policy
- Definition
- Component
- Receipts
- Revenue and Capital Account
- Tax revenue, expenditure, budget.
Social Issues
- Health Policy Financing
- Education Policy
- Cleanliness
- Drinking Water
- Social Security
- Infrastructure Policy
- International Trade Issues
- Regional Cooperation
Current Affairs related to the above topics
- MNERGS
- MSME
- Make in India
- Industrial corridor
- Policy commission
- Money earned by doing dishonest things
- International treaties and organizations
- India’s policies with neighbours
UPSC Optional Economics Syllabus for Mains
The UPSC Economics optional course is closely linked with the General Studies paper for both the Prelims and Main examination, making it a popular choice as a UPSC optional subject.
UPSC Economics Optional Syllabus for Paper 1
Advanced Microeconomics
- Marshallian and Walrasian approaches to pricing
- Alternative distribution theory: Ricardo, Kaldor, Kalecki
- Market Structure: Monopolistic Competition, Monopoly, Oligopoly
- Modern welfare criteria: Pareto Hicks and Skitovsky, Arrow’s impossibility theorem, A.K. Sen’s social welfare work
Advanced Macroeconomics
- Approaches to employment income and interest rate determination: Classical, Keynes (IS-LM) curve, neo-classical synthesis and new classical, interest rate determination and interest rate structure theories.
Money – Banking and Finance
- Demand and supply of money: Money multiplier quantity theory of money (Fisher, Pigou and Friedman) and Keynes’ theory on money demand, targets and tools of monetary management in closed and open economies. The relationship between the Central Bank and the Treasury.
- Proposal to set a limit on the growth rate of money.
- Public finance and its role in a market economy: in the stabilization of supply, allocation and distribution of resources and development. Sources of government revenue, types of taxes and subsidies, their incidence and effects. Taxation, debt, crowding-out effects and borrowing limits. Public expenditure and its effects.
International Economics
Old and New Theories of International Trade
- Comparative Advantage
- Terms of trade and offer curve
- Product cycle and strategic business theory
- Trade as an engine of growth and the principles of underdevelopment in an open economy.
Forms of Protection: Tariffs and Quotas
Balance of Payments Adjustment: Alternative Approach
- Price vs. Earnings, Earnings Adjustment under Fixed Exchange Rates
- principles of the policy mix
- Exchange rate adjustment under capital mobility
- Floating rates and their implications for developing countries: currency boards
- Trade Policy and Developing Countries
- BOP, adjustment and policy coordination in open economy macro-models.
- speculative attacks
- trade block and monetary union
- WTO: TRIMS, TRIPS, Domestic Measures, Various Rounds of WTO Negotiations
Growth and Development
- Growth
- Theories of Development: Harrod’s Model
- Lewis’s Model of Development with Surplus labour
- Balanced Unbalanced Development
- Human Capital and Economic Growth
- Research & Development and Economic Development
- Process of Economic Development of Less Developed Countries: Myrdal and Kuznets on Economic Growth and Structural Change: Role of Agriculture in Economic Development of Less Developed Countries
- Economic Development and International Trade and Investment, Role of MNCs
- Planning and Economic Development: Changing Role of Market and Planning, Private-Public Partnership
- Well-being indicators and measures of development – Human Development Index. basic needs approach
- Development and Environmental Sustainability – Renewable and non-renewable resources, environmental degradation, inter-generational equity development
UPSC Economics Optional Syllabus for Paper 2
Indian Economy in the Pre-Independence Era
- Land system and its changes, commercialization of agriculture, drainage theory, laissez-faire theory and criticism. Manufacture and Transport: Jute, Cotton, Railways, Money and Credit
Indian Economy After Independence
Pre-Liberalization Era
- Advocates, Gadgil and V.K.R.V. Rao’s contribution
- Agriculture: Land Reforms and Land Ownership System, Green Revolution and Capital Formation in Agriculture
- Structure and development of industry trends, the role of the public and private sector, and small and cottage industries.
- National and per capita income: patterns, trends, overall and regional structure and changes therein
- Broad factors determining national income and distribution, measures of poverty, trends in poverty and inequality
Post-Liberalization Era
- New Economic Reforms and Agriculture: Agriculture and WTO, Food Processing, Subsidies, Agricultural Prices and Public Distribution System, Impact of Public Expenditure on Agricultural Development
- New Economic Policy and Industry: Industrialization strategy, privatization, disinvestment, foreign direct investment and role of multinationals.
- New Economic Policy and Trade: Intellectual Property Rights: Implications of TRIPS, TRIMs, GATS and New EXIM Policy
- New Exchange Rate Regime: partial and full convertibility, capital account convertibility
- New Economic Policy and Public Finance: Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation
- New Economic Policy and Monetary System. RBI’s role under the new system
- Planning: From Central Planning to Indicative Planning, to Development and Decentralized Planning Relationship between Planning and Market: 73rd and 74th Constitutional Amendments
- New Economic Policy and Employment: Employment and Poverty, Rural Wages, Employment Generation, Poverty Alleviation Schemes, New Rural Employment Guarantee Scheme
Upsc Economics Optional Exam Pattern
Candidates have to appear in two optional papers which are Economics Optional Paper 1 and Paper 2.
- There will be 2 papers for Economics optional subject in UPSC IAS Mains.
- Each paper will be of 250 marks, making a total of 500 marks.
- The time duration to solve the UPSC Economics paper is 3 hours.
- Each paper will have objective answer-type questions.
- There is no negative marking.
| Paper | Subjects | Maximum Marks | Time Duration |
| Paper VI | Economics Optional Paper-I | 250 | 3 Hours (for each paper) |
| Paper VII | Economics Optional Paper-I | 250 | |
| Total | 500 | ||
Tips to Prepare for UPSC IAS Economics Syllabus
Some of the best ways to prepare for the UPSC Economics syllabus are given below:
- Answer writing is a big part of UPSC Mains. Nothing compares to mastering the art of writing answers. Start with the previous year’s Economics optional exam questions for the UPSC Mains exam. Then, enrol in a good test series and practice writing answers with time and space constraints.
- The Economics option of the UPSC Mains exam consists of both static and dynamic sections. Include excerpts from current events in your answers to make them more content-rich. As a result, keep your notes updated with recent events.
- Create a separate folder for economics news and organize it according to sections and sub-sections. To maximize retention, incorporate current events into your post-writing exercises.
- Develop a fundamental understanding of economic concepts. Read Economics NCERT from Class VIII to XII to get a good understanding of the basic concepts.
- While reading standard books, keep in mind that you should focus only on those topics that are included in your UPSC Economics optional syllabus. Make quick notes on these points to help you repeat them more effectively.
- Making a complete timetable will be very beneficial. The timetable helps in distributing time, which ultimately helps in covering the topics more effectively.
- Another essential thing is to focus more on solving previous years’ question papers giving various mock tests and attempting the UPSC Civil Services test series.
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