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IAS (UPSC CSE) Prelims 2021 Preparation Strategy for GS Economics

Updated On -

Feb 23, 2021

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As an IAS aspirant, you will be expected to have sufficient knowledge of the Indian economy, as the knowledge will have practical application throughout your career. Many aspirants find this to be the toughest part of both IAS Prelims and Mains as this is a subject that requires thorough conceptual understanding. To be a successful IAS officer, you have to remain updated with the recent economic trends and policies of the country which is only possible when your basis for this subject is strong. The economics questions in IAS Prelims are more current affairs-oriented which makes it difficult to find a suitable reference book or determine a fixed syllabus to follow. The IAS(UPSC CSE) Prelims 2021 is scheduled on June 27, 2021 and hence, it is the high time to start with your preparation for this topic.

Check IAS 2021 Preparation Tips, Important Books and Exam Pattern

Syllabus Highlights

IAS (UPSC CSE) Prelims Economics Syllabus

The following is an overview of the important topics from Indian economics that you must cover when you are preparing for the IAS prelims:

  • Economic and social development
  • Sustainable development
  • Poverty, initiatives in social sectors, demographics of the country
  • Finance, banking, budget, population composition, health and sanitation, international financial situations

Topics you must focus on:

  • Fiscal policy- 
    • Definition of the policy
    • Various characteristics of the policy
    • Components, receipts, revenue and capital account
    • Tax revenue
    • Expenditures
    • Influence on budget

Check IAS Mains Economics Syllabus, Important topics

  • Economic growth and development-
    • Basic concepts of economics and definition of economy
    • Transfer and uses of resources
    • Macro and microeconomic policies
    • The balance between micro and macroeconomics
    • Impact of economic policies on the distribution of wealth
    • What are the determinants of growth and development of the country from an economic point of view
    • Concepts of MPI/HPI, HDI, PQLI, GDI/GII, GEM, TAI
    • Green index
    • India’s position in various economic indices
  • Poverty-
    • Definition
    • Concept of distribution and deprivation
    • Causes of poverty
    • Concept of income and calories
    • Status and measurements of poverty
    • Different types of poverty eradication programs, and resource policies
    • Tribal rights
  • Inclusion-
    • Types of inclusion
    • Recent initiatives related to inclusion
    • Relevance 
    • Financial inclusion
Preparation tips

Tips to prepare for UPSC Economics Prelims

The following are a few important pointers to keep in mind regarding your preparation for economics for IAS Prelims:

  • Focus on clearing your concepts on topics like Niti Aayog, GST, Money Supply, the structure of taxation, LPG reforms, human development, Inflation, GDP, banking. These are core topics of economics and the questions you will get will be some way or the other associated with these. Having a clear conception can help you attempt them successfully.
  • UPSC has conceptual questions in objective form which means you can attempt them when your basics are clear. Here is an example of a question:

What steps should RBI take when Inflation is high?

  1. Decrease REPO
  2. Increase REPO
  3. Increase CRR
  4. Both B and C
  5. None of the above

For a candidate to ace questions like these, it is elementary that they have a clear concept of REPO, CRR, and inflation. This is where going through the NCERT books as well as additional reference books will be helpful.

  • For attempting factual questions related to economic current affairs, follow a national-level newspaper daily. Make notes of the news date-wise, specifically focusing on the international news pages and the finance and business sections.

Must Read: How to read a newspaper for IAS exam

Reference Books

IAS (UPSC CSE)- Reference Books for Economy and Tips to select them

The first and foremost step is to find the right books that cover all these topics in detail as well as easy to read. Begin your study with the basics from the NCERT books. Economics for class IX is a good start as it covers all the basic topics needed for UPSC Prelims. Here’s what you must particularly focus on while reading these books:

  • Chapter-1- organization of production, need for land, labor and capital, types of capital
  • Chapter-2- the concept of human resources, human capital formation, the difference from physical capital, primary, secondary and tertiary sectors, quality of the population, concepts of unemployment.
  • Chapter-3- anti-poverty measures, inter-state disparities, poverty line, and its concept.
  • The last chapter- “Food Security in India”- the concept of buffer stock, public distribution system, current PDS status, rationing, and role of cooperatives.
  • Read each of these chapters thoroughly and attempt the exercise at the end to check how far you have progressed.
  • If your conception is clarified through your study, you will be able to do the exercise easily.

Next, move on the class X NCERT for economics:

  • Chapter-1- Development, the sustainability of development and human development report
  • Chapter-2- different sectors of the Indian economy, organized and unorganized sector, public and private sectors
  • Chapter-3- money and credit, activities of the bank, terms of credit, formal sector credits, self-help groups
  • Chapter-4- globalization of Indian economy and its effects on the national level
  • Basics of consumer rights

Must read: Best Books For UPSC CSE Prelims Exam 2021

Economics NCERT Class XI- The entire book focuses on Indian Economic development and the different concepts, features, and ideas associated with it. You will learn the basic concepts in detail from this book.

Economics NCERT Class XII or Introductory Macroeconomics gives you a basic idea about macro and microeconomics. Many students find these two concepts a bit difficult to grasp especially if they did not have economics as a part of the higher studies in their graduation days.

A few more reference books for studying IAS prelims economics:

  • Indian Economy- Ramesh Singh
  • India economy since independence- Uma Kapila
  • Indian Economy- Mishra and Puri
  • Indian economy: Performance and policies- Uma Kapila
  • The Indian Economy Book- Sanjiv Verma
  • Economic survey (volume 1 and 2)- Ministry of Finance
  • Indian Economy- Datt and Sundaram
  • Economic survey
  • Economic and political weekly
  • Indian Year Book

You will get several questions related to economics in your UPSC prelims and it has a separate paper dedicated to the subject in your mains. It is wiser to start your basic preparation in a manner where your preparation for the Prelims becomes the foundation for the mains preparation. Keeping the detailed way to study the NCERT books in mind will help you ace the test with better marks as you can attempt the economic-related questions too.

*The article might have information for the previous academic years, please refer the official website of the exam.