UPSC IAS Prelims Strategy for GS Economics

As an IAS aspirant, you will be expected to have sufficient knowledge of the Indian economy, irrespective of whether it is a subject you had in your graduation combination or not. Many aspirants find this to be the toughest part of both IAS Prelims and Mains as this is a subject that requires thorough conceptual understanding. To be a successful IAS officer, you have to remain updated with the recent economic trends and policies of the country which is only possible when your basis for this subject is strong. The economics questions in IAS Prelims are more current affairs-based which makes it difficult to find a suitable reference book. We have shared a detailed preparation strategy to guide the aspirants such that they are able to attempt the majority of the economics questions correctly.

UPSC IAS Prelims syllabus for economics

The following is an overview of the important topics from Indian economics that you must cover when you are preparing for the IAS prelims:

  • Economic and social development
  • Sustainable development
  • Poverty, initiatives in social sectors, demographics of the country
  • Finance, banking, budget, population composition, health and sanitation, international financial situations

Topics you must focus on:

  • Fiscal policy- 
    • Definition of the policy
    • Various characteristics of the policy
    • Components, receipts, revenue and capital account
    • Tax revenue
    • Expenditures
    • Influence on budget
  • Economic growth and development-
    • Basic concepts of economics and definition of economy
    • Transfer and uses of resources
    • Macro and microeconomic policies
    • Balance between micro and macroeconomics
    • Impact of economic policies on distribution of wealth
    • What are the determinants of growth and development of the country from an economic point of view
    • Concepts of MPI/HPI, HDI, PQLI, GDI/GII, GEM, TAI
    • Green index
    • India’s position in various economic indices
  • Poverty-
    • Definition
    • Concept of distribution and deprivation
    • Causes of poverty
    • Concept of income and calories
    • Status and measurements of poverty
    • Different types of poverty eradication programs, and resource policies
    • Tribal rights
  • Inclusion-
    • Types of inclusion
    • Recent initiatives related to inclusion
    • Relevance 
    • Financial inclusion

Selecting the right books to study UPSC prelims economics

The first and foremost step is to find the right books that cover all these topics in detail as well as easy to read. Begin your study with the basics from the NCERT books. Economics for class IX is a good start as it covers all the basic topics needed for UPSC Prelims. Here’s what you must particularly focus on while reading these books:

  • Chapter-1- organization of production, need for land, labor and capital, types of capital
  • Chapter-2- the concept of human resources, human capital formation, the difference from physical capital, primary, secondary and tertiary sectors, quality of the population, concepts of unemployment.
  • Chapter-3- anti-poverty measures, inter-state disparities, poverty line, and its concept.
  • The last chapter- “Food Security in India”- the concept of buffer stock, public distribution system, current PDS status, rationing, and role of cooperatives.
  • Read each of these chapters thoroughly and attempt the exercise at the end to check how far you have progressed.
  • If your conception is clarified through your study, you will be able to do the exercise easily.

Next, move on the class X NCERT for economics:

  • Chapter-1- Development, sustainability of development and human development report
  • Chapter-2- different sectors of the Indian economy, organized and unorganized sector, public and private sectors
  • Chapter-3- money and credit, activities of the bank, terms of credit, formal sector credits, self-help groups
  • Chapter-4- globalization of Indian economy and its effects on the national level
  • Basics of consumer rights.

Economics NCERT Class XI- The entire book focuses on Indian Economic development and the different concepts, features, and ideas associated with it. You will learn the basic concepts in detail from this book.

Economics NCERT Class XII or Introductory Macroeconomics gives you a basic idea about macro and microeconomics. Many students find these two concepts a bit difficult to grasp especially if they did not have economics as a part of the higher studies in their graduation days.

A few more reference books for studying IAS prelims economics:

  • Indian Economy- Ramesh Singh
  • India economy since independence- Uma Kapila
  • Indian Economy- Mishra and Puri
  • Indian economy: Performance and policies- Uma Kapila
  • The Indian Economy Book- Sanjiv Verma
  • Economic survey (volume 1 and 2)- Ministry of Finance
  • Indian Economy- Datt and Sundaram
  • Economic survey
  • Economic and political weekly
  • Indian Year Book

Tips to prepare for UPSC Economics Prelims

The following are a few important pointers to keep in mind regarding your preparation for economics for IAS Prelims:

  • Focus on clearing your concepts on topics like Niti Aayog, GST, Money Supply, the structure of taxation, LPG reforms, human development, Inflation, GDP, banking. These are core topics of economics and the questions you will get will be some way or the other associated with these. Having a clear conception can help you attempt them successfully.
  • UPSC has conceptual questions in objective form which means you can attempt them when your basics are clear. Here is an example of a question:

What steps should RBI take when Inflation is high?

  1. Decrease REPO
  2. Increase REPO
  3. Increase CRR
  4. Both B and C
  5. None of the above

For a candidate to ace questions like these, it is elementary that they have a clear concept of REPO, CRR, and inflation. This is where going through the NCERT books as well as additional reference books will be helpful.

For attempting factual questions related to economic current affairs, follow a national-level newspaper daily. Make notes of the news date-wise, specifically focusing on the international news pages and the finance and business sections.

Civil Services Examination is the most prestigious examination conducted by UPSC for recruitment to various All India Services including I.A.S, I.P.S, I.R.S and various Group A Services and Group B Services. In this article, we focus on discussing some important questions and books for IAS Mains Economics optional subject. Economics is one of the highest-scoring optional subjects in the UPSC Civil Services Examination.

How to Prepare Economics Optional?

In Economics, understanding the concept fully is very important. As the economy is ever-changing so one has to keep reviewing facts in the light of current events. UPSC economics is completely non-mathematical and totally diagrammatical. To score the maximum in less time, the following are the important topics one should try to be through with-

Basic Economic Indicators: (Statistical Data)Features of Indian EconomyPopulationNational IncomeAgriculture
– National Income – Production – Price Index – Foreign Trade – Population– Division of Economic activities – Unemployment– Types – Poverty – HDR – Measures to eliminate poverty– Population growth – Population policy 2000 – Census – 2001 – Consumption Pattern – Energy Consumption – Sources of energy – various programmes– Methods of National Income calculation – Concepts of National Income– Importance – Crops & seasons – Agricultural Credit agencies. NABARD, RRB. Etc., – Kisan Credit Schemes – Land Reforms – Agricultural Insurance, NAIS, Seed Crop Insurance – Green, Yellow, White, Blue revolutions – Irrigation projects – Drip irrigation – Development measures
IndustryMoney and BankingForeign TradeInternational Organization Development and employment Programmes PlanningPublic Finance
– Industrial Policies – 1948,1956,1991 – Initiatives taken – Small Scale Industries – Various key industries – Various Committees and their recommendations – Industrial sickness – Dis investment – PSE Policy – Industrial Finance– Aspects of money market – Credit Control – various Rates – Commercial Banks, Co-operatives, NBFC – Committees, and recommendations – SEBI – Stock market developments – Insurance Industry – New Banking Sector reforms – Inflation, Deflation – Money supply measures– Composition and direction – Exim policy and other Acts – Foreign Trade improvement measures taken – WTO – BOP– Planning Commission – 5-year Plans and imported features– Finance Commission – Various formulas for Plan assistance to states – Taxation – Reforms – Public spending and Debt – Deficit financing

Most Expected Questions for IAS Mains Economics

One of the important requirements of the IAS Mains Exam is that answer should be crisp and to-the-point. Over here, we are listing some important questions for IAS Mains Economics subject-

  1. “The Marginal Cost of funds based lending rate methodology for computing interest rates will make Indian Banks more Competitive and enhance their long-run value and contribution to the economy”. Discuss
  2. The GST will be a game-changing reform for the Indian economy by creating a common Indian market and reducing the cascading effect of the tax. Discuss.
  3. Indian states responded effectively to floods and tsunamis but finds water and power metering more challenging. Discuss
  4. Failure of a Public-Private Partnership to deliver large infrastructure projects is mainly due to inappropriate structuring of the agreements. Examine the problems in the existing models of PPP.
  5. The repeated devaluation of the Chinese currency and the Asian tigers has dampened global growth expectations. What is the impact on the Indian Economy?
  6. ‘Smart cities require smart public finance and sound property taxation regime is vital to India’s urban future”. Discuss
  7. Mines and Minerals (Development and Regulation) Act 2015 and Coal Mines special provisions act 2015 aimed to bring back the mining sector and coal sector from the legal issues in court, environment, regulatory, and land acquisition. Discuss
  8. The Indian Banking sector exhibited several weak spots. Examine the recent problems of Indian Banking and the regulatory steps taken to reform the Banking sector.
  9. The farmer’s e-market platform National Agricultural Market with the mission of one Nation one market will provide for a one-stop solution to the inefficiencies created by APMCs in the market for farm produce? Discuss
  10. Explain how the Paris agreement will succeed Kyoto protocol and goes one step forward in bringing together all nations to combat climate change.

Distribution of Questions

From a quick glance, the following table that lists the topic-wise number of questions asked earlier. This is a good guide for you to know which economy topics to focus more as compared to others.

  1. Indian Economy – the majority of questions are asked from this area; there are usually about 40-45 questions per year from this section.
  2. Statistics- there are about 7- 10 questions every year.
  3. Growth and Development – about 10 questions.
  4. Micro and Macro Economics – about 35 – 40 questions every year.
  5. International Economics – about 15-20 questions every year.
  6. Money, Banking & Public Finance – about 10 -15 questions every year

Economics Books for IAS Exam

Good book is a success of every exam. If you want to crack the IAS Exam, buy books according to the syllabus and written by a good writer. NCERT Textbooks are very good for building basics for Preparation. We have compiled for you a list of IAS books for Economics, which will help you in IAS preparation.

Books on Economics as Optional subject for IAS Exam are as Follows:

List of books on EconomicsName of Author’s
An Introduction to EconomicsA.W. Stonier and D.C. Hauge
Monetary Theory and Public PolicyKenneth Kurihara
Public FinanceH.L. Bhatia
Indian EconomyMishra and Puri
International EconomicsBo Soderston
BankingS.B. Gupta
International TradeBo Soderston
Indian EconomyRamesh Singh
Growth and DevelopmentM L Jhingan
Modern BankingR.S. Sayers

Leave a Reply