UPSC Mains Exam Syllabus - Economics Optional
PAPER – I
1. Advanced Micro Economics:
(a) Marshallian and Walrasiam Approaches to Price determination.
(b) Alternative Distribution Theories: Ricardo, Kaldor, Kaleeki
(c) Markets Structure: Monopolistic Competition, Duopoly, Oligopoly.
(d) Modern Welfare Criteria: Pareto Hicks & Scitovsky, Arrow’s Impossibility
Theorem, A.K. Sen’s Social Welfare Function.
2. Advanced 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
3. Money - Banking and Finance: (a)
Demand for and Supply of Money: Money Multiplier Quantity Theory of Money
(Fisher, Pique and Friedman) and Keyne’s 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
(b) Public Finance and its Role in Market Economy: In stabilization of supply,
allocation of resources and in distribution and development. Sources of Govt.
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.
4. International Economics:
(a) 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 under development in an open
(b) Forms of Protection: Tariff and quota.
(c) 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 Implicationns for Developing Countries: Currency
(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.
5. Growth and Development:
(a) (i) Theories of growth: Harrod’s model,
(ii) Lewis model of development with surplus labour
(iii) Balanced and Unbalanced growth,
(iv) Human Capital and Economic Growth.
(v) Research and Development and Economic Growth
(b) 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.
(c) Economic development and International Trade and Investment, Role of
(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
PAPER – II
1. 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.
2. Indian Economy after Independence: A
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 their in.
(v) 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: Strategy of industrialization,
Privatization, Disinvestments, Role of foreign direct investment and
(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
(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
(viii) New Economic Policy and Employment: Employment and poverty, Rural wages,
Employment Generation, Poverty alleviation schemes, New Rural, Employment