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UPSC Economics Optional Syllabus

Explore the complete and updated UPSC Economics Optional syllabus for Paper I and II. This subject covers key areas like microeconomics, macroeconomics, Indian economic development, and international trade.

UPSC Economics Course Details

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UPSC Economics Optional Syllabus

Curious about what’s covered in the UPSC Economics Optional syllabus for 2025? Wondering how to prepare for Paper I and II effectively? This guide answers all your questions—exploring micro and macroeconomics, Indian economy, international trade, and key preparation strategies. Download the complete syllabus PDF and start your UPSC Mains prep the right way.

UPSC Economics Optional Paper 1

Advanced Microeconomics​

  1. Marshallian & Varassiam Approaches to Price Determination,

  2. Alternative Distribution Theories- Ricardo, Kaldor & Kaleeki,

  3. Market Structures: Monopolistic, Duopoly, Oligopoly,

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

 

Advanced Macroeconomics​

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.

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Money-Banking and Finance​

  1. Demand for and Supply of Money: Money Multiplier Quantity Theory of Money (Fisher, Pigou and Friedman) and Keynes’ 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 of money.

  2. 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.

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​International Economics

1. 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 underdevelopment in an open economy.

 

2. Forms of protection: Tariff and quota.

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3. 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 implications for developing Countries: Currency Boards.

(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.​

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Growth and Development

1. Theories of growth

(i) Theories of growth: Harrod’s model;

(ii) Lewis model of development with surplus labour.

(iii) Balanced Unbalanced Growth.

(iv) human capitals and Economic Growth.

(v) Research and Development and Economic Growth.

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2. Process of Economic Development of less developed countries

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

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3. Economic Development and International Trade and Investment, Role of Multinationals.

 

4. Planning and economic Development: Changing role of Markets and Planning, Private-Public Partnership.

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5. Welfare indicators and measures of growth: Human development indices. The basic needs approach.

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6. Development and Environmental Sustainability: Renewable and Non Renewable Resources, Environmental Degradation, Intergenerational equity development.​

UPSC Economics Optional Paper 2

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.

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Indian Economy after-Independence Era

1. The Pre-Liberalization Era:

  1. Contribution of Vakil, Gadgil and V.K.R.V. Rao.

  2. Agriculture: Land Reforms and land tenure system, Green Revolution and capital formation in agriculture.

  3. Industry Trends in composition and growth, Role of public and private sector, Small scale and cottage industries.

  4. National and Per capita income: patterns, trends, aggregate and Sectoral composition and changes therein.

  5. Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality​

2. The Post Liberalization Era:

  1. ​New Economic Reform and Agriculture: Agriculture and WTO, Food processing, subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth.

  2. New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals.

  3. New Economic Policy and Trade: Intellectual property rights : Implications of TRIPS, TRIMS, GATS and new EXIM policy.

  4. New Exchange Rate Regime: Partial and full convertibility, Capital account convertibility.

  5. New Economic Policy and Public Finance: Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation.

  6. New Economic Policy and Monetary system. Role of RBI under the new regime.

  7. Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments.

  8. New Economic Policy and Employment: Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural, Employment Guarantee Scheme.​

DEMO classes : Indian Economic Service(IES)

Indian Economic Service Coaching (IES) : Faculty


Our faculty is a highly qualified former Delhi University Professor who completed Master's in Economics from Delhi School of Economics. She has also been a guest lecturer at many reputed MBA institutes.

For teaching, we have gone through several books and journals both national and international, and gathered all the information so that it can presented and accessible to the student. The entire study material is prepared from very basic level so that every student can understand every topic from the syllabus. Besides the theory being extensively discussed, an enormous collection of problems has been added so that the student can learn to apply the concepts over a diverse spectrum of difficulty. All the problems have been worked out thoroughly so that in case the student gets stuck, we've got you covered! 

Students who are interested in economics as a topic might consider applying for the Indian Economic Service Online Coaching in India. Economics is a dynamic subject that is utilised to make national policy. The IES test not only gives a student access to policymaking and economic engagement but also fulfils desires for professional dignity.

At ArthaPoint, students will be given a detailed description of various career options, analytical skills, tricks, and methods to easily solve highly competitive examinations using ArthaPoint'S study materials and video content, giving them an advantage over other students.
 

Well, to be honest, this should not be a feature; it is required of any institute that assists in completing the course entirely; nonetheless, we attempt to go one step deeper in each area to provide a greater comprehension of the course.
 

We must comprehend that the IES course is more in-depth than the IAS Economics mains; thus, our preparation should be more serious. Furthermore, the expectation from an IES candidate is up to the postgraduate level in Economics, as opposed to IAS Economics, where the expectation is merely at the undergraduate level. ArthaPoint assists you in completely preparing for the Indian Economic Service Courses in India.

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