UPSC Economics Optional Syllabus 2024

Post Name : UPSC Economics Optional Syllabus 2024 | IAS Exam
Post Date :  09 April, 2024
Post Description : Economics is a crucial optional subject in the UPSC Civil Services Exam, covering microeconomics, macroeconomics, Indian economic development, international economics, and mathematical methods. Candidates need a deep grasp of economic theories and their real-world applications to excel. This article explores each segment of the Economics optional, aiding candidates in specializing and showcasing their expertise.

UPSC Economics Optional Syllabus For Paper I 

TopicsSub Topics
  • Advanced Microeconomics
  1. Marshallian & Varassiam Approaches to Price Determination,
  2. Alternative Distribution Theories- Ricardo, Kaldor & Kaleeki,
  3. Market Structures: Monopolistic, Duopoly, Oligopoly,
  4. Modern Welfare Criteria: Pareto Hicks and Scitovsky, Arrow’s Impossibility Theorem, A.K. & Sen’s Social Welfare Function.
  • Advance Macro Economics
  • Approaches to Employment Income Rate Determination: Classical, Keynes (IS)-LM) curve, Neo & New- Classical Synthesis, Theories of Interest, Rate Determination & Interest Rate Structures.
  • Money- Banking & Finance
  1. Demand for & Supply or Money: Money Multiplier Quantity Theory of Money (Fisher, Pique & Friedman) & Keynes’s Theory on Demand for Money, Goals & Instruments of Monetary Management in Closed & Open Economics. Relation between the Central Bank & the Treasury. Proposal for Ceiling on Growth Rate of Money.
  2. Public Finance & its Role in Market Economy: In Stabilisation of Supply, Allocative of Resources & in Distribution & Development. Sources of Government Revenue, Forms of Taxes & Subsidies, their Incidence & Effects. Limits to Taxation, Loans, Crowding-out, Effects & Limitations to Borrowing, Public Expenditure & its Effects.
  • International Economics
  1. Old & New Theories International Trade- 
    1. Comparative Advantage,
    2. Terms of Trade & Offer Curve,
    3. Product Cycle & Strategic Trade Theories,
    4. Trade as an Engine of Growth & Theories of Underdevelopment in an Open Economy.
  2. Forms of Protection: Tariff & Quota.
  3. Balance of Payment Adjustments: Alternative Approaches:
    1. Price versus Income, Income Adjustments under Fixed Exchange Rates,
    2. Theories of Policy Mix,
    3. Exchange Rate Adjustments Under Capital Mobility,
    4. Floating Rates and their Implications for Developing Countries: Currency Boards,
    5. Trade Policy & Developing Countries,
    6. BOP, Adjustments & Policy Coordination in Open Economy Macro-model,
    7. Speculative Attacks,
    8. Trade Blocks & Monetary Unions,
    9. WTO: TRIMS, TRIPS, Domestic Measures, Different Rounds of WTO talks.
  • Growth & Development
    1. Theories of Growth: Harrod’s Model,
    2. Lewis Model of Development with Surplus Labour,
    3. Balanced Unbalanced Growth,
    4.  Human Capitals & Economic Growth,
    5. Research & Development
  1. Process of Economic Development of Less Developed Countries: Myrdal & Kuzments on Economic Development & Structural Change: Role of Agriculture in Economic Development of Less Developed Countries.
  2. Economic Development & International Trade & Investment, Role of Multinationals.
  3. Planning & Economic Development: Changing Role of Markets & Planning, Private- Public Partnership.
  4. Welfare Indicators & Measures of Growth- Human Development Indices. The Basic Needs Approach.
  5. Development & Environment Sustainability- Renewable & Non-renewable Resources, Environment Degradation, Intergenerational Equity Development.

UPSC Economics Optional Syllabus For Paper 

TopicsSub Topics
  • Indian Economy in Pre  Independence Era
Land Systems & its Changes, Commercialization of Agriculture Drain Theory, Laissez-Faire Theory & Critique. Manufacture & Transport: Jute, Cotton, Railways, Money & Credit.
  • Indian Economy after Independence
  • The Pre-Liberalization Era : 
      1. Contribution of Vakil, Gadgil and V.K.R.V. Rao.
      2. Agriculture: Land Reforms and land tenure system, Green Revolution and capital formation in agriculture.
      3. Industry Trends in composition and growth, Role of public and private sector, Small scale and cottage industries.
      4. National and Per capita income : patterns, trends, aggregate and Sectoral composition and changes therein.
      5. Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.
  • The Post Liberalization Era : 
    1. New Economic Reform and Agriculture: Agriculture and WTO, Food processing, subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth.
    2. New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals.
    3. New Economic Policy and Trade: Intellectual property rights : Implications of TRIPS, TRIMS, GATS and new EXIM policy.
    4. New Exchange Rate Regime: Partial and full convertibility, Capital account convertibility.
    5. New Economic Policy and Public Finance : Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation.
    6. New Economic Policy and Monetary system. Role of RBI under the new regime.
    7. Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments.
    8. New Economic Policy and Employment: Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural, Employment Guarantee Scheme.

UPSC Economics Optional Topper Copy

Analyzing the Economics optional topper copy can provide valuable insights into effective exam preparation strategies. Toppers often emphasize the importance of understanding core concepts, mastering numerical methods, and practicing answer writing regularly. They also recommend using real-world examples to illustrate economic theories and concepts effectively. Following their strategies can help aspirants enhance their preparation and improve their performance in the exam.

UPSC Economics Optional Notes

Creating comprehensive Economics optional notes is essential for effective exam preparation. Notes should cover all topics mentioned in the syllabus, including key concepts, theories, and examples. Organizing notes in a structured manner and revising them regularly can help reinforce understanding and retention of important information. Additionally, making summary notes and mind maps can aid in quick revision before the exam.

UPSC Economics Optional Books

Choosing the right Economics optional books is vital for comprehensive preparation. Some recommended books for the Economics optional include

  • Basic NCERT Books For UPSC Economics Optional

    • Class 11th and 12th NCERT for basics
    • “Indian Economy” by Ramesh Singh.
  • Reference Books For UPSC Economics Optional Paper I

  • Microeconomics: 

      • H.L Ahuja for Microeconomics
      • Advanced Economic Theory: Microeconomic Analysis – H. L. Ahuja
      • Modern Microeconomics – A. Koutsoyiannis
      • Monetary Economics – S. B. Gupta
  • Macroeconomics: 

      • Musgrave for Public Finance
      • RBI Website for Banking Concepts & latest Monetary Policy
      • Richard Froyen for Macroeconomics
      • H.L Bhatia for Public Finance
  • International Economics

      • International Economics by Paul Krugman and Maurice Obstfeld.
      • International Economics – D. Salvatore
      • Open Economy Macroeconomics from Froyen
      • Websites of WTO, Euro Zone, Trade Blocs
      • Dominick and Salvatore for International Economics
  • Growth and Development

      • A.P Thirlwall for Growth and Development
      • Economic Development by Todaro & Smith
      • Human Development Report and Other Important Indicators.
  • Reference Books For UPSC Economics Optional Paper II

  • Pre Independence Indian Economy:  Trithankar Roy
  • Indian Economy since Independence: Uma Kapila
  • Economic Survey: Current & Last year
  • RBI website, NITI Aayog, PIB, & PRS

UPSC Economics Optional Question Paper Pattern 

  • Paper Structure:

    • Economics Optional consists of two papers: Paper I and Paper II.
    • Each paper carries 250 marks.
  • Paper I Sections:

    • Paper I is divided into two sections.
    • Each section contains four questions.
  • Compulsory Questions:

    • Question 1 from section 1 and Question 5 from section 2 are compulsory for all candidates.
  • Question Selection:

    • Candidates must choose from the remaining 6 questions.
    • They should strategically select questions they feel confident in answering to maximize marks.
  • Applying Strategy:

    • Candidates need to assess their strengths and weaknesses to pick questions they can answer effectively.
    • Selecting questions that align with their strengths can help in fetching more marks.

UPSC Economics Optional Previous Year Questions (PYQ)

Practicing Economics optional previous year questions is crucial for familiarizing oneself with the exam pattern and understanding the types of questions asked. Analyzing PYQs can also help identify recurring themes and topics that require more attention during preparation. Additionally, solving PYQs under timed conditions can improve speed and accuracy during the actual exam.

The Economics optional question paper consists of both theoretical and numerical questions, requiring candidates to demonstrate their understanding of economic concepts and their ability to apply them to real-world scenarios. Practicing solving diverse question types and mastering numerical methods is essential for scoring well in this paper.

YearUPSC Economics Optional Question Papers PDF Link
2023UPSC Economics Optional Paper 2

UPSC Economics Optional Paper 1

2018UPSC Economics Optional Question Paper 1

UPSC Economics Optional Question Paper 2

Benefits of UPSC Economics Optional

Choosing economics optional as a subject in UPSC gives pros and cons of this subject. Let us see both aspects of economics.

  • Rational and Logical Subject: Economics is a subject grounded in reason and logic. It allows you to analyze economic phenomena systematically.
  • Scoring Potential: Economics is generally considered a scoring subject. Candidates who understand its concepts well can perform consistently.
  • Overlap with GS Paper III: Opting for Economics covers approximately 60% of the UPSC syllabus for General Studies (GS) Paper III. This overlap can be advantageous in your overall preparation.
  • Prelims Paper Coverage: In the preliminary examination, you can score at least 30 marks from the Economics optional subject.
  • Availability of Study Material: There are abundant books and study materials available for Economics. Aspirants can access a wide range of resources.
  • Recommended for Science/Technical Background: Even candidates with a science or technical background can choose Economics. Its rational nature makes it accessible to diverse backgrounds.
  • Clear-Cut Syllabus: The UPSC syllabus for Economics is specific and well-defined. If you grasp the concepts, you can construct effective answers.
  • Graphical Understanding: Proficiency in using and interpreting graphs can lead to high marks in Economics papers.
  • Interest Requirement: To excel in Economics, you need a genuine interest in the subject. Some find it a bit dry, so passion matters.
  • Mathematical Aptitude: Economics involves mathematical concepts. A decent understanding of mathematics is essential.
  • Graphs Everywhere: Graphs are integral to Economics. Comfort with graphical representations is necessary.
  • Precision and Accuracy: Being a technical subject, precise and accurate answers are crucial.

Preparation Strategy for UPSC Economics as an Optional

  • Conceptual Clarity First:

    • Master core concepts of microeconomics, macroeconomics, and Indian economy.
    • Understand economic theories, models, and policies thoroughly.
  • Syllabus Familiarization:

    • Review entire Economics optional syllabus.
    • Break it down into sections and plan study accordingly.
    • Make concise notes for easier revision.
  • Notes Making:

    • Take clear, concise notes covering main ideas, theories, and case studies.
    • Arrange notes neatly and update them regularly.
  • Interlinking Paper I and Paper II:

    • Connect concepts between microeconomics (Paper I) and macroeconomics (Paper II).
    • Understand how economic theories and policies interact.
  • Practice Numerical Problems:

    • Some topics require numerical analysis.
    • Practice solving numerical problems and be prepared with data for certain topics.
  • Answer Writing/Test Series:

    • Take regular test series to assess understanding of key concepts and application of theories.
    • Practice answer writing under exam conditions for effective time management.
  • Stay Updated:

    • Keep track of current economic developments.
    • Read newspapers and relevant articles to familiarize with contemporary economic issues.

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