Strategy - How to Prepare Economics for UPSC
Significance of Indian Economy
Indian Economy is one of the core subjects mentioned in UPSC Prelims and Mains Exam. In IAS Prelims Exam, at least 20% questions come from Economy. In IAS Mains Exam, at least one-third of the paper contains Economy questions. IAS Mains General Essay Paper may contain at least one topic from Economy.
Difference between Economics and the Economy
Let us first understand the difference between Economics and the Economy.
Economics means science that studies economies and develops possible methods for functioning. Economics is concerned with Theory.
Economy means interplay between different economic factors like production, trade and money supply in a particular region or country. Economy is concerned with Practicality.
For example, developing a theory or concept like Phillips Curve that studies the relationship between Inflation and Unemployment
For instance, Indian Economy is in recession or growing; US currency is weakening etc.
Ex: Auction Theory got 2020 Nobel Prize
Ex: Covid-19 impacted global Economy or Employment etc.
Economics Theories is mostly universal
Economic conditions are Specific to a region.
For your convenience and preparation purpose, Indian Economy can be divided into two: Basic Economy and Current Economy.
Basic Economy: It deals with all the concepts including Macro Economics – Basic static concepts include:
- Measurement of National Income, Poverty & Unemployment and Growth and Development, Inflation, Forex Reserves and Balance of Payments etc.,
- Planning in India
- Agriculture and Allied Sectors
- Industrial Policies & Industrial Sector
- Services Sector- Banking, Insurance & Trade
- Money Market & Capital Market
- Taxation- Direct Tax Code, GST and MAT etc.
- Structure and Mandate of world economic organisations- IMF, WB and WTO etc.
Basic Economy is crucial not only to have a clear understanding of the subject but also to understand current economy. For Basic Economy, refer to NCERT books (especially, Macro Economics, Economic Development Since Independence).
Current Economy: It includes:
- Latest Government Policies, Schemes and Initiative w.r.t. to Macro Economics and Infrastructure development etc.
- Trends in Demographics
- Monetary Policy of MPC
- Fiscal Policy of Government including Annual Budget- Taxation, Spending pattern on Agriculture, Industries and Services sector.
- Annual Economic Survey Report- Before you start this, you must complete the Basic economy
- Various socio-economic reports and indices etc.
- Finance Commission Recommendations, if any
- Understanding the dynamics of the global and national economy
UPSC IAS Exam preparation should be one of integrated nature. That means the aspirant has to consider Mains Syllabus for preparing for both Prelims and Mains.
The reason is UPSC mentioned Prelims Economy syllabus very broadly as mentioned below:
UPSC IAS Prelims Syllabus: Economic and Social Development –
- Sustainable Development
- Social Sector initiatives, etc.
This is the reason where most of the aspirants who appeared for the Prelims Exam feel that UPSC has asked questions out of the syllabus. Hence aspirant must look into Mains syllabus for details of Prelims syllabus.
UPSC IAS Mains Syllabus (GS PAPER-III): Economic Development-
- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
- Inclusive Growth and issues arising from it.
- Government Budgeting.
- Major Crops - Cropping Patterns in various parts of the country, - Different Types of Irrigation and Irrigation Systems; Storage, Transport and Marketing of Agricultural Produce and Issues and Related Constraints; E-technology in the aid of farmers.
- Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices; Public Distribution System - Objectives, Functioning, Limitations, Revamping; Issues of Buffer Stocks and Food Security; Technology Missions; Economics of Animal-Rearing.
- Food Processing and Related Industries in India- Scope’ and Significance, Location, Upstream and Downstream Requirements, Supply Chain Management.
- Land Reforms in India.
- Effects of Liberalization on the Economy, Changes in Industrial Policy and their Effects on Industrial Growth.
- Infrastructure: Energy, Ports, Roads, Airports, Railways etc.
- Investment Models.
Reference for UPSC GS Paper-III (Economy)
NCERT textbooks- class X, XI & XII
Indian Economy by Ramesh Singh
Indian Economy by Sanjeev Verma
Websites of Ministries- Finance, Commerce and Industry, Water, Power, Corporate Affairs, Statistics and Programme Implementation and www.data.gov.in etc.
RBI’s Annual Report
Economic & Political Weekly,
Newspapers- The Hindu (Business Page, Editorial and Op-Ed)
Kurukshetra (Agriculture & Rural Development) and Yojana (Schemes)
Tips for Effective preparation
- Identify micro topics and subtopics which are not explicitly mentioned in the Mains syllabus. Reference books will provide detailed contents (micro/subtopics) of each topic.
- You must have at least 100 words of matter related to each micro topic
- Make crisp and clear notes for all micro topics and subtopics
- Integrate subject with Current affairs/ daily news : Add current news/ issue as context to the related topic or subtopic. For example, Impact of Covid-19 on employment in India.
- Focus should on Issues rather than news
- Regular updation of notes with current affairs
- Repeated Revision of written notes
- Solving previous year papers for Prelims and Mains
- Practice Answer writing every day after completion of a topic. Because you have to answer a question in 200 words in just 9 min.
- Correcting the mistakes with re-reading the topics and refining the topics.
- Try to discuss topics with a small group of friends. But don’t waste much time on discussion.
Success depends on Confidence. Confidence depends on Readiness. Readiness depends on Preparedness.
Hence spend time effectively for preparation, revision and answer writing only. Because Time is precious for competitive exams and more so for the Civil Services Exam.
Always think positive!!
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