UPSC Economics Optional Syllabus: Overview 

In the mains stage of the UPSC IAS Exam, there are 48 optional subjects and Economics is one of them. Since economics is a rational subject, aspirants from any domain can choose economics as their optional subject. The Economics optional UPSC Syllabus overlaps with the IAS Prelims GS Paper 1 and Mains GS Paper 3, so even if candidates do not select Economics as an optional subject, they have to prepare for some important economics topics for the prelims and mains exam. In this article, we will have a detailed look at the UPSC Economics Optional Syllabus, important topics, preparation tips and more! So, let's get started!

Here, in this article, we present in detail the UPSC Economics Syllabus, exam pattern, best reference books and exam preparation tips.

Also, check out the Economics Syllabus for UPSC Prelims Exam on the linked article.

UPSC Economics Syllabus For Optional Paper 1

Economics optional syllabus for UPSC is necessary to know in order to cover all the topics from which questions will be asked. UPSC mains economics syllabus for paper 1 optional includes topics such as Advanced Micro and Macro Economics, Market Structures, Demand for & Supply or Money, Balance of Payment Adjustments among others. Check the complete syllabus for Economics optional paper 1 below:

Advanced Micro Economics

• Marshallian and Walrasian Approaches to Price determination
• Alternative Distribution Theories: Ricardo, Kaldor, Kalecki
• Markets Structure: Monopolistic Competition, Duopoly, Oligopoly
• 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 and Interest Rate determination: Classical, Keynes (IS-LM) curve, Neo-classical synthesis and New classical, Theories of Interest Rate determination and Interest Rate Structure

Money - Banking and Finance

• Demand for and Supply of Money : Money Multiplier Quantity Theory of Money (Fisher, Pigou and Friedman) and Keynes’ Theory on Demand for Money, Goals and Instruments of Monetary Management in Closed and Open Economies. Relation between the Central Bank and the Treasury.
  Proposal for ceiling on growth rate of money.
• Public Finance and its Role in market economy : in stabilization of supply, allocation of resources and in distribution and development. Sources of Government revenue, forms of Taxes and Subsidies, their incidence and effects. Limits to taxation, loans, crowding-out effects and limits to borrowings. 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 trade theories
  • Trade as an engine of growth and theories of underdevelopment in an open economy.
• Forms of protection: Tariff and Quota
• Balance of Payments Adjustments: Alternative Approaches
  • Price versus income, income adjustments under fixed exchange rates
  • Theories of Policy mix
  • Exchange rate adjustments under capital mobility
  • Floating Rates and their implications for developing Countries: Currency Boards
  • Trade Policy and Developing Countries
  • BOP, adjustments and Policy Coordination in open economy macro-model
  • Speculative attacks
  • Trade Blocks and Monetary Unions
  • WTO: Trims, TRIPS, Domestic Measures, Different Rounds of WTO talks

Growth and Development

• Growth
  • Theories of growth : Harrod’s model
  • Lewis model of development with surplus labour
  • Balanced Unbalanced Growth
  • human capitals and Economic Growth
  • Research and Development and Economic Growth
• Process of Economic Development of less developed countries: Myrdal and Kuznets on economic development and structural change: Role of Agriculture in Economic Development of less developed countries
• Economic Development and International Trade and Investment, Role of Multinationals
• Planning and economic Development: changing role of Markets and Planning, Private-Public Partnership
• Welfare indicators and measures of growth - Human development indices. The basic needs approach
• Development and Environmental Sustainability - Renewable and Non Renewable Resources, Environmental Degradation, Intergenerational equity development

UPSC Economics Optional Syllabus For Paper 2

Optional subjects play a vital role in keeping candidates on the merit list and acing the exam, candidates need to have a list of topics that need to be covered. Those who have chosen economics as their optional subject must have a thorough understanding of the syllabus. Economics optional syllabus for UPSC contains topics like Indian Economy Post Independence, Laissez-Faire Theory, New Economic Policy & Monetary System, Role of RBI and others. Check the complete syllabus for paper 2 of Economics optional:

Indian Economy in Pre-Independence Era

• Land System and its changes, Commercialization of agriculture Drain theory, Laissez faire theory and critique. Manufacture and Transport: Jute, Cotton, Railways, Money and Credit

Indian Economy After Independence

• The Pre-Liberalization Era
  • Contribution of Vakil, Gadgil and V.K.R.V. Rao
  • Agriculture: Land Reforms and land tenure system, Green Revolution and capital formation in agriculture
  • Industry Trends in composition and growth, Role of public and private sector, Small scale and cottage industries
  • National and Per capita income: patterns, trends, aggregate and Sectoral composition and changes therein
  • Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality
• The Post-Liberalization Era
  • New Economic Reform and Agriculture: Agriculture and WTO, Food processing, Subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth
  • New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and 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. Role of RBI under the new regime
  • Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 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 Syllabus PDF

Candidates should give proper time to know the Economics optional syllabus. For a better understanding, one must have a UPSC Economics optional syllabus PDF. This PDF will be helpful in marking the important topics that can be asked in the exam, candidates can also take a print copy of the UPSC Economics syllabus PDF and keep it with themselves. Click on the links given below to download the PDF in English or Hindi language.

UPSC Economics Optional Exam Pattern

Candidates will have to appear for two optional papers which are Economics Optional Paper 1 and Paper 2. The papers are for 250 marks each. Candidates must be thorough with the complete pattern of the Economics paper ahead of appearing for the examinations. Check the complete details here.

• There will be 2 papers for the economics optional subject in UPSC IAS Mains.
• Each paper would comprise 250 marks, which makes it 500 marks in total.
• The time duration to attempt the UPSC economics paper is 3 hours.
• Each paper would have objective answer-type questions.
• There is no negative marking.

Check the detailed IAS Exam Pattern here.

How To Prepare For UPSC Economics Syllabus?

Selecting economics as an optional subject is a great choice. Candidates from different backgrounds such as tech, science, commerce, etc. can do well in this subject, provided they have adequate knowledge and prepare well. Economics is considered to be a scoring subject and is majorly chosen by the UPSC aspirants. Some of the best ways to prepare for the UPSC economics syllabus are given below:

1. Answer writing is a big part of UPSC Mains. Nothing compares to mastering the art of answer writing. Start with questions from the previous year’s economics optional exam for UPSC Mains. Then, enrol in a good test series and practice writing answers in a time and space constraint.
2. The UPSC Mains Economics option consists of both static and dynamic sections. Include snippets from current events in your answers to make them more content-rich. As a result, keep your notes up to date with recent events.
3. Make a separate folder for economics news and organize it by sections and sub-parts. To maximize retention, incorporate current events into your answer-writing practice.
4. Develop a fundamental understanding of economic concepts. To get a good understanding of basic concepts, read Economics NCERTs from Class VIII to XII.
5. To improve your understanding of the fundamental concepts, read books by Ramesh Singh or Mishra and Puri. It will broaden your knowledge and comprehension.
6. While reading the standard books, keep in mind that you should only concentrate on the topics that are covered in your UPSC Economics optional syllabus. Make quick notes on these points to help you revise it more effectively.
7. It is requisite to jot down the UPSC Economics Syllabus and to keep a track of the topics done and the topics which are left.
8. Having a thorough timetable would be of great benefit. The timetable helps in distributing the time, which ultimately helps in covering the topics more effectively.
9. Another necessary thing is to focus more on solving previous years’ question papers and to appear for various mock tests and to attempt the UPSC civil services test series.
10. Reference books play a vital role. So, the aspirants must cling to a few but the best books, this helps in better understanding and efficient learning.
11. Candidates must keep a track of their errors in the test series, analyse their weak points and then must work on it accordingly.

Check some more UPSC IAS Previous Year’s Question Papers for other subjects here!

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