UPSC CSE Economics Optional
Economics Optional in UPSC Civil Servants Examination is one of the 48 subjects an aspiring candidate can choose for their optional paper in the exam. UPSC CSE is a Civil Services Examination conducted by the Union Public Service Commission for the recruitment of civil servants in various services such as Indian Administrative Service (IAS), Indian Foreign Service (IFS), Indian Police Services (IPS) and more. The exam is conducted in three stages: Preliminary (Screening), Mains and Interview.The Preliminary stage is a screening test that consists of two objective papers: General Studies and Civil Services Aptitude Test (CSAT). The Mains stage is a written examination that consists of nine papers: four General Studies, one Essay, two Language, and two Optional subject papers. The Personality Test is an interview that assesses the candidate’s suitability for the civil service.
Economics can be opted for the optional paper in UPSC CSE exam. The Mains written exam has two papers for the chosen optional subject, each paper is of 250 marks. This means an economics optional paper will account for 500 marks.
What is the importance of Economics Optional?
Economics optional is important for the UPSC CSE exam because its preparation will cover General Studies paper III syllabus as well that includes most of the similar topics such as Indian economy, agriculture, industry, infrastructure, budget, banking, etc. This can save time and effort in preparing for both the papers. An understanding of economy is of course beneficial for civil servant officers which provides them with critical knowledge on public finance, international relations, and overall working of the economy. It enhances practical knowledge and sharpens logical skills expected out of a civil servant.
Benefits of Choosing Economics Optional
Challenges of Choosing Economics Optional
1. Economics requires good conceptual knowledge and numerical ability.
2. It requires extensive reading and revision of theories, development and trends.
3. It demands a high level of accuracy and precision in answer writing.
4. Candidates have to give proper terminologies, diagrams, and should be detail oriented and analytical.
UPSC Economics Optional Eligibility Criteria
Economics optional can be chosen by an aspirant irrespective of their educational background, degree or stream. There is no specific eligibility criterion for this. However, the candidates should consider factors like, their interest, aptitude, familiarity and exposure to the subject matter as well as availability and accessibility to the subject guidance. Apart from this, all the rules of UPSC CSE eligibility criteria regulate the exam as a whole where the age limit is minimum 21 years and maximum 32 years.
UPSC Economics Optional Exam Pattern
The Economics Optional Exam Pattern has been covered as follows:
- An aspirant has to give two optional papers: Economics Optional paper 1 and Economics Optional Paper 2.
- Each paper accounts for 250 marks for the Mains written exam.
- Each paper duration will be three hours.
- The questions are divided into two sections: Section A and Section B.
- There will be eight questions. The candidate has to attempt 5 questions in all.
- Question 1 to 5 are compulsory and out of the remaining any three questions are to be attempted, choosing one from each section. Each question carries 50 marks.
- The questions may be analytical, theoretical, or numerical in nature. Candidates have to use appropriate diagrams, graphs, equations, and examples to support their answers.
- The answers have to be written in English only.
UPSC Economics Optional Syllabus
Economics Optional Syllabus For Paper-1
Economics Optional Syllabus For Paper-1
Marshallian and Walrasian Approach to Price determination.
Alternative Distribution Theories; Ricardo, Kaldor, Kaleeki.
Markets Structure: Monopolistic Competition, Duopoly, Oligopoly.
Modern Welfare Criteria: Pareto Hicks and Scitovsky, Arrow’s Impossibility Theorem, A. K. Sen’s Social Welfare Function.
Approaches to Employment Income and Interest Rate determination:
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, Pique, and Friedman)
Keynes’s Theory on Demand for Money,
Goals and Instruments of Monetary Management in Closed and Open Economies.
The relation between the Central Bank and the Treasury.
Proposal for ceiling on the 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.
Old and New theories of International Trade.
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 Adjustment: 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.
Trade Blocs and Monetary Unions.
WTO: TRIMS, TRIPS, Domestic Measures, Different Rounds of WTO talks.
Growth and Development
Theories of growth
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 Kuzments 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,
Welfare indicators and measures of growth
Human Development Indices.
The basic needs approach.
Development and Environmental Sustainability
Renewable and Non-renewable Resources,
Intergenerational equity development.
Economics Optional Syllabus For Paper-2
Economics Optional Syllabus For Paper-2
The Pre-Liberalization Era
The Post-Liberalization Era
New Economic Reform and Agriculture
Agriculture and WTO,
Agricultural prices and public distribution system,
Impact of public expenditure on agricultural growth.
New Economic Policy and Industry:
The strategy of industrialization,
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,
the Twelfth Finance Commission and
Fiscal Federalism and
New Economic Policy and Monetary System.
Role of RBI under the new regime.
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,
Poverty alleviation schemes,
New Rural Employment Guarantee Scheme.
Economics Optional Preparation Roadmap
Where do we come in?
Ecoholics offers a variety of courses, and preparation tools that cater to different levels and stages of the exam preparation. You can check out the full catalogue of courses here. If you have any questions or feedback about the courses, feel free to reach out to our course counsellors at +91 7880-10-7880. Learn from the best!
CSE stands for Civil Services Examinations in context to UPSC. Hence, jointly stated as UPSC CSE.
Economics is one of the optional subjects offered by the UPSC in the civil services mains exam. Economics has a good success rate among candidates. There have been toppers with this optional also. Toppers like Gaurav Agarwal, the first rank holder in the Civil Service Exam of 2013, testify that Economics as an optional can yield good results with some hard work and practice. However, one must choose the subject only if they are of real interest in this field. The subject can feel daunting at the beginning to those who are not aware of its intricacies.
Their are some of the commonly recommended books and study material for economics optional are:
- For Paper I:
- Microeconomics by H.L. Ahuja
- Macroeconomics by H.L. Ahuja
- Money and Banking by S.B. Gupta
- Public Finance by H.L. Bhatia
- International Economics by Dominick Salvatore
- For Paper II:
- Indian Economy by Uma Kapila
- Indian Economy by Mishra and Puri
- Economic Survey of India by Ministry of Finance
- Economic Development and Policy in India by Uma Kapila
- Statistical Methods by S.P. Gupta
Aspirants can also refer to NCERT books for clearing basic concepts.
Economics optional requires a degree level knowledge. Economics optional can be difficult due to its mathematical application to theories and vast syllabus with technically written books. However, step by step preparation with a strategy in mind and practice of writing clear good answers can help an aspirant in clearing the exam with flying colours. .
Economics optional paper balance approach is to aim for around 150+ in both the papers in total the aim would be a score of 300 plus for the optional paper.