UPSC IAS Mains 2020: Syllabus for Economics Optional Papers

UPSC: Economics Optional subject is quite popular among UPSC aspirants with Commerce and Economics background. Check here UPSC IAS Mains Syllabus for Economics Optional paper.

Created On: Oct 15, 2020 16:49 IST
 UPSC IAS Mains 2020: Syllabus for Economics Optional Subject
UPSC IAS Mains 2020: Syllabus for Economics Optional Subject

UPSC:  Most UPSC Mains candidates choose Economics as an optional subject due to the widely available resources and the largely overlapping of the syllabus with General Studies for Prelims and Mains. Candidates with Economics degree or who work as economists, finance managers, trade compliance, and international trade professionals or bankers can opt for Economics as their optional. In this article, we have provided a detailed syllabus for both the papers covered under the Economics optional syllabus. 

Also Check: UPSC IAS Optional Papers Syllabus:

UPSC Optional Paper Syllabus for Economics- Paper I 

  1. Advanced Micro Economics :

(a) Marshallian and Varrasiam Approach to Price determination.

(b) Alternative Distribution Theories; Ricardo, Kaldor, Kaleeki.

(c) Markets Structure: Monopolistic Competition, Duopoly, Oligopoly.

(d) Modern Welfare Criteria: Pareto Hicks and Scitovsky, Arrow’s Impossibility Theorem, A. K. Sen’s Social Welfare Function.

  1. 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.
  1. Money-Banking and Finance :

(a) Demand for and Supply of Money: 

  • Money Multiplier Quantity Theory of Money (Fisher, Pique, and Friedman) 
  • Keyne’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.

(b) 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.
  1. International Economics :

(a) 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.

(b) Forms of Protection: 

  • Tariff and quota.

(c) 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 macromodel.
  • Speculative attacks.
  • Trade Blocks and Monetary Unions.
  • WTO: TRIMS, TRIPS, Domestic Measures, Different Rounds of WTO talks.
  1. Growth and Development :


  • 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.

(b) Process of Economic Development of less developed courtries: 

  • Myrdal and Kuzments on economic development and structural change: 
  • Role of Agriculture in Economic Development of less developed countries.

(c) Economic Development and International Trade and Investment, Role of Multinationals.

(d) Planning and Economic Development: 

  • changing role of Markets and Planning,
  • Private-Public Partnership.

(e) Welfare indicators and measures of growth

  • Human Development Indices. 
  • The basic needs approach.

(f) Development and Environmental Sustainability

  • Renewable and Non-renewable Resources, 
  • Environmental Degradation, 
  • Intergenerational equity development.

UPSC Optional Paper Syllabus for Economics- Paper-II (Indian Economics in Post-Independence Era)

A. The Pre-Liberalization Era 

  • Contribution of Vakil, Gadgil and V.K.R.V. Rao.
  • Agricultrure : 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.

B. 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: 

  • The 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, 
  • the 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.

Also Check: 



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