Optional
Economics
UPSC Civil Services Mains, optional subject
Syllabus
Paper I
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.
- (i) Comparative advantage,
- (ii) Terms of Trade and offer curve.
- (iii) Product cycle and Strategic trade theories.
- (iv) 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.
- (i) Price versus income, income adjustments under fixed exchange rates.
- (ii) Theories of Policy mix.
- (iii) Exchange rate adjustments under capital mobility.
- (iv) Floating Rates and their implications for developing Countries: Currency Boards.
- (v) Trade Policy and Developing Countries.
- (vi) BOP, adjustments and Policy Coordination in open economy macro-model.
- (vii) Speculative attacks.
- (viii) Trade Blocks and Monetary Unions.
- (ix) WTO : Trims, TRIPS, Domestic Measures, Different Rounds of WTO talks.
Growth and Development
- (i) Theories of growth : Harrod’s model
- (ii) Lewis model of development with surplus labour.
- (iii) Balanced Unbalanced Growth.
- (iv) human capitals and Economic Growth.
- (v) 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.
Paper II
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
- (i) Contribution of Vakil, Gadgil and V.K.R.V. Rao.
- (ii) Agriculture: Land Reforms and land tenure system, Green Revolution and capital formation in agriculture.
- (iii) Industry Trends in composition and growth, Role of public and private sector, Small scale and cottage industries.
- (iv) National and Per capita income : patterns, trends, aggregate and Sectoral composition and changes therein.
- (v) Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.
- The Post Liberalization Era
- (i) New Economic Reform and Agriculture: Agriculture and WTO, Food processing, subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth.
- (ii) New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals.
- (iii) New Economic Policy and Trade: Intellectual property rights : Implications of TRIPS, TRIMS, GATS and new EXIM policy.
- (iv) New Exchange Rate Regime: Partial and full convertibility, Capital account convertibility.
- (v) New Economic Policy and Public Finance : Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation.
- (vi) New Economic Policy and Monetary system.
- Role of RBI under the new regime.
- (vii) Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments.
- (viii) New Economic Policy and Employment: Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural, Employment Guarantee Scheme.
Syllabus as published by UPSC in the Civil Services Examination 2026 notification.