Economy Notes for UPSC Prelims and Mains Examination

Economy

An economy is a region where products and services are produced, distributed, traded, and consumed. It is generally understood to be a social domain that places an emphasis on the behaviours, discourses, and tangible manifestations connected to the creation, use, and management of finite resources. In other words, the economic realm is a social domain made up of connected human behaviours and exchanges that cannot exist independently.

Economy for UPSC

A country, a region, a single industry, or even a family may be represented by an economy. Few economies in the modern world are completely market- or command-based. While command-based economies are governed by a government agency, market-based economies, also known as free market economies, are self-regulatory. Check the links below for getting the all essential information’s based on economy required for UPSC and other competitive examination.

Economy Notes for UPSC

Mastering economics at UPSC is a crucial step toward success in one of India’s toughest examinations. Ensure you cover the key topics, use recommended study materials, and leverage notes to enhance your preparation. The following notes are essential reading materials for candidates preparing for a variety of examinations.

Basic Concepts

• Types of Economy System & Sectors
• Core Sectors of Indian Economy 
• Concept of GDP, GNP, NNP and NDP, Basic Economy Terms
• Mixed Economy
• Socialist Economy
• Capitalist Economy 
• Macroeconomics and Microeconomics
• Primary Sector of Indian Economy 

Economic Development in India

• Economic Growth and Development
• Sustainable Development Goals (SDGs)
• Economic Liberalization in India
• LPG Refoms in India
• Inclusive growth and issues arising from it
• FRBM Act 
• Poverty and its eradication
• Human development indicators
• Circular Flow of Income

Planning and Economic Development

• Planning in India
• Planning Commission of India
• Five-Year Plans and Related Issues
• National Development Council 
• NITI Aayog and its role

Economic Growth and Development

• Measurement of economic growth – GDP, GNP, etc.
• Factors determining economic growth and development
• Issues related to poverty, unemployment, and inequality
• Demand and Supply Law
• Gross Domestic Product
• GDP of Indian States 2023 
• Gross Value Added (GVA)
• Net Domestic Product
• Gross National Product 
• National Income
• Purchasing Power Parity Theory
• GDP Deflator Formula
• Inflation 
• Types of Inflation in Economics 
• India’s GDP Growth Rate

Agriculture

• Agricultural Produce Marketing Committee (APMC)
• List Of Agriculture Revolutions In India From 1960-2023
• Types Of Farming In India
• Agriculture and allied activities in India
• Government policies, subsidies, and support
• Agricultural productivity and challenges
• Land reforms

Industry

• Industrial policy and its evolution
• Department for Promotion of Industry and Internal Trade  
• Infrastructure development
• Public sector and disinvestment
• Small-scale industries in India
• Special Economic Zone
• Labour Laws in India
• Industrial Dispute Act 1947
• Index of Industrial Production

Services Sector

• Service sector in the Indian economy
• Tourism, IT, and ITES sectors
• Purchasing Managers Index (PMI)
• Wholesale Price Index 
• Producer Price Index in India 
• Consumer Price Index of India

MSMEs Sector

• Definition and Classification of MSMEs
• Government Initiatives

Investment 

• Disinvestment in India
• Foreign Portfolio Investment (FPI)
• Foreign Direct Investment (FDI)
• SEBI

Stock exchanges

• Difference Between BSE and NSE 
• List of Stock Exchanges in India

Banking and Financial Institutions

• Banking Sector Reforms in India Since 1991
• Banking reforms and regulations
• Role of the Reserve Bank of India (RBI)
• Non-Banking Financial Companies (NBFC)
• Microfinance and Self-Help Groups (SHGs)
• Regional Rural Banks In India
• India post payment bank
• Bank Board Bureau (BBB)
• NABARD
• Urban Cooperative Banks
• Basel Norms in India
• Indian Financial System

Public Finance and Fiscal Policy

• Budgeting and fiscal policy
• Taxation and subsidies
• Public debt and deficits

Tax System

• Tax System in India 
• Central Board of Direct Taxes (CBDT)
• Goods and Services Tax

External Sector

• External Sector of India 
• External Debt of India 
• Balance of payments
• Exchange rates and their determination
• India’s trade policy and agreements
• Double Taxation Avoidance Agreement (DTAA)
• External Commercial Borrowing (ECB)
• FERA and FEMA
• Capital Account Convertibility (CAC)
• NEER & REER Concept 
• Forex Reserve 
• Foreign Capital

International Economic Organizations and Agreements

• The Bretton Woods institutions
• World Trade Organization (WTO)
• Asian Infrastructure Investment Bank (AIIB)
• Asian Development Bank (ADB)
• New Development Bank (NDB)/ BRICS BANK
• Bilateral and regional agreements

Money and Banking

• Functions of money
• Role of central banks
• Monetary System in India
• Repo Rate And Reverse Repo Rate
• RBI Monetary Policy Committee
• Depreciation and Appreciation of Currency
• Micro ATMs in India 
• Bad Bank
• Banking Ombudsman Scheme 
• Non-Performing Assets (NPA)
• Reserve Bank of India (RBI)
• Priority Sector Lending
• Marginal Cost of Funds Based Lending Rate (MCLR)
• National Payments Corporation of India (NPCI)
• Payment Banks in India
• Pension Fund Regulatory and Development Authority (PFRDA)
• Liquidity Adjustment Facility (LAF)
• Unified Payment Interface (UPI)
• Marginal Standing Facility
• Statutory Liquidity Ratio (SLR)
• Bank Rate
• Cash Reserve Ratio
• Demonetisation 2.0
• Private Sector Banks in India
• Public Sector Banks in India
• List of Scheduled Commercial Banks in India
• Banking System in India
• Insurance Regulatory and Development Authority of India (IRDAI)
• Insurance Sector in India
• Money Market
• List of Financial Regulatory Bodies in India
• Financial Market
• Capital Market
• Broad Money and Narrow Money
• Money Multiplier
• Digital Currency in India
• Commercial Banks
• Types of Bank Accounts 

Inflation

• Types and measurement of inflation
• Causes and consequences of inflation
• Inflation targeting

Poverty and Unemployment

• Poverty In India, Causes and Consequences 
• Measurement of poverty
• Kuznets Curve
• Gini Coefficient
• Phillips Curve
• Government schemes for poverty alleviation and employment generation
• Unemployment Rate Of India 2023

Inclusive Growth

• Informal Economy in India
• Difference between Organised and Unorganised Sector

Food Processing Sector

• Types of Food Processing
• Segments in the Industry
• Government Initiatives
  • National Food Processing Policy, 2019
  • PMFME Scheme: Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme
  • PMKSY: Pradhan Mantri Kisan SAMPADA Yojana for food processing
  • PLISFPI: Production Linked Incentive Scheme for Food Processing Industry
  • Operation Greens: Initiative to stabilize the supply of tomato, onion, and potato
  • ODOP Scheme: One District One Product Scheme to promote local specialities

Economic Survey and Budget

• Government Budgeting
• Economic Survey 2023 Highlights
• Per Capita Income of India
• Union Budget 2023-24 
• Union Budget 2023 for Health and Education Sector
• Union Budget 2023 for Railways
• Union Budget 2023 Highlights for Agriculture Sector

Current Economic Affairs

• Contemporary economic issues and developments in India and globally
• Economic surveys and reports
• How India Can Become A $5 Trillion Economy By 2029?
• GDP Of Indian States 2023
• Digital India Mission
• Fugitive Economic Offenders Act 2018 
• Exchange Traded Funds (ETFs) 
• Liberalized Exchange Rate Management System (LERMS)
• Foreign Contribution Regulation Act (FCRA)
• Gold Monetisation Scheme 
• Direct Benefit Transfer Scheme
• National Pension Scheme
• Mission Indradhanush
• Physical Quality of Life Index (PQLI)
• Green Accounting
• Carbon Tax
• UPI Charges

Economy Syllabus

The UPSC Economics Syllabus will be covered in both the Mains and Prelims exams. Additionally, it is listed in the UPSC Syllabus as one of the optional subjects. The UPSC Mains exam’s General Studies 3 paper contains the syllabus. Since economics is covered in all stages, it is one of the most popular optional subjects among candidates. The UPSC economics syllabus will include questions about current events, trade, agriculture, transportation, and other topics.

UPSC Economy Syllabus for Prelims and Mains

If you’re getting ready to take the UPSC civil services exam, you already know that economics will be covered in both the IAS prelims and the mains. Check the detailed Syllabus for economy below in the table:

UPSC Economy Syllabus for Prelims and Mains
Section	Details
Economic growth and development	Basic concept and definition of economy and economics, uses and transfer of resources, distributive effects, macro and micro economic policy, micro-macro balance, distributive impact of economic policies, development versus growth, determinant of growth and development, concepts such as HPI/MPI, HDI, PQLI, GEM, GDI/GII, TAI, Green index, sustainable development, India’s ranking in the various indices.
National income and Basic Economic Indicators	National income concepts, methods of calculation, price index, production, population, foreign trade
Features of Indian Economy	Division of economic activities, poverty, unemployment, HDR, measures to eradicate poverty
Demography	Census data, populations by gender, by state, by age group, socio-economic status, caste, religion, literacy levels, etc. Trends in human development – interstate comparison, etc.
Agriculture	Crops, seasons, agricultural credit agencies, Kisan Credit agencies, land reforms, insurance, green, white, blue, yellow revolutions, irrigation
Industry	Industrial policies (1948, 1956, 1991), small scale industries, key industries, industrial sickness, the different committees, disinvestment, PSU policy, industrial finance
Money and banking	Money market, credit control (different rates), commercial banks, cooperative banks, NBFCs, committees, SEBI, stock market developments, insurance industry, new banking sector reforms, money supply measures, inflation, deflation
Fiscal policy	Definition, component, receipts, revenue and capital account, tax revenue, expenditure, budget, finance commission, deficit financing, public spending and debt
Foreign trade	composition, direction, EXIM policy, WTO, balance of payments, measures to improve foreign trade
International organisations	WTO, IMF, ADB, BRICS Bank etc
Planning commission  five year plans	Five year plans
Social issues	Financing health policy, education policy, sanitation, drinking water, social security, infrastructure policy, international trade issues, regional cooperation
Inclusion	Definition, relevance, types, financial inclusion, recent initiatives
Poverty	Definitions, causes, distribution-deprivation, income versus calories, measurement of poverty, status of poverty, eradication programmes, poverty and resource policy, tribal rights and issues, livelihood mission.
Current Affairs	Also, focus on issues currently in news related to the above topics – MNERGS, MSMEs, Make in India, industrial corridors, NITI Ayog, black money, international treaties and organisations, India’s policies with neighbours, Economic Survey and Budget.