Is Economics Best Optional for IAS? What are the Success Rate & Advantages?

The optional subject significantly influences the candidate’s overall score. It’s essential to pick the appropriate optional subject. One of the most fascinating subjects and the finest optional subject is economics. It is the most valuable elective subject. In recent years, many outstanding students have chosen economics. A technical subject that is still relevant today is economics. The subject has a high success rate, encouraging candidates to choose it.

Since they are more familiar with the concepts and have a clearer understanding of the subjects, candidates with an economics background are likely to perform better. Thus, it is a benefit for students studying economics. They often cover the curriculum in a shorter amount of time by taking less time.

Students who are new to the subject can choose the economics option, but it will take them longer to finish the curriculum because they are not familiar with its principles. Each person’s time is unique and varies. However, a non-economics student will have to work very hard to comprehend the concepts and fully grasp the course material.

Since many top students have decided to take economics as an elective, it has become increasingly popular over the past few years and has consistently been a high-scoring subject. Although the topic is technical, it is nevertheless pertinent to the present.

As was already indicated, candidates who made economics optional have had a decent success rate. Candidates who have prior experience in this field are unquestionably at an advantage and can easily finish the syllabus in less time due to idea familiarity. It could take some time to finish the syllabus if the student is completely uninitiated in the field. The amount of time needed to prepare varies from person to person. To prepare effectively for optional classes, read the complete syllabus and keep it close to hand.

Economics Syllabus – Paper 1

1. Advance 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 Structure.

2. Advanced Micro Economics

  • Marshallian and Walrasian Approaches to Price determination.
  • Alternative Distribution Theories: Ricardo, Kaldor, Kaleeki.
  • Markets Structure: Monopolistic Competition, Duopoly, Oligopoly.
  • Modern Welfare Criteria: Pareto Hicks & Scitovsky, Arrow’s Impossibility Theorem, A.K. Sen’s Social Welfare Function.

3. International Economics

  • Old and New Theories of International Trade
  • Comparative Advantage
  • Terms of Trade and Offer Curve
  • Product Cycle and Strategic Trade Theories
  • Trade as an engine of growth and theories of under development in an open economy
  • Forms of Protection: Tariff and quota
  • Balance of Payments Adjustments: Alternative Approaches.
  • Price versus income, income adjustments under fixed exchange rates
  • Theories of Policy Mix
  • Exchange rate adjustments under capital mobility
  • Floating Rates and their Implications for Developing Countries: Currency Boards
  • Trade Policy and Developing Countries
  • BOP, adjustments, and Policy Coordination in open economy macro-model
  • Speculative attacks
  • Trade Blocks and Monetary Unions
  • WTO: TRIMS, TRIPS, Domestic Measures, Different Rounds of WTO talks

4. Growth and Development

  • Theories of growth
  • Harrod’s model,
  • Lewis’s model of development with surplus labor
  • Balanced and Unbalanced growth,
  • Human Capital and Economic Growth.
  • Research and Development and Economic Growth
  • 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.
  • Economic development and International Trade and Investment, Role of Multinationals
  • Planning and Economic Development: the changing role of Markets and Planning, Private- Public Partnership.
  • Welfare indicators and measures of growth – Human Development Indices. The basic needs approach.
  • Development and Environmental Sustainability – Renewable and Non-Renewable Resources, Environmental Degradation, Intergenerational equity development.

5. Money – Banking and Finance

  • Demand for and Supply of Money
  • Money Multiplier Quantity Theory of Money (Fisher, Pique, and Friedman)
  • 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 the growth rate of money
  • Public Finance and its Role in Market Economy
  • In stabilization of supply, allocation of resources, and 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.

Economics Syllabus – Paper 2

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

  • The Pre-Liberalization Era
  • Contribution of Vakil, Gadgil, and V.K.R.V. Rao
  • Agriculture: Land Reforms and land tenure system, Green Revolution, and capital formation in agriculture
  • Industry Trends in composition and growth, Role of the public and private sector, Small scale, and cottage industries
  • National and Per capita income: patterns, trends, aggregate and Sectoral composition, and changes therein
  • Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality
  • The Post-Liberalization Era
  • New Economic Reform and Agriculture: Agriculture and WTO, Food processing, Subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth
  • New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals.
  • New Economic Policy and Trade: Intellectual property rights: Implications of TRIPS, TRIMS, GATS, and new EXIM policy
  • New Exchange Rate Regime: Partial and full convertibility, Capital account convertibility
  • New Economic Policy and Public Finance: Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation
  • New Economic Policy and Monetary system
  • Role of RBI under the new regime
  • Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments.
  • New Economic Policy and Employment: Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural, Employment Guarantee Scheme.

Candidates who have prior experience in this field are unquestionably at an advantage and can easily finish the syllabus in less time due to idea familiarity. It could take some time to finish the syllabus if the student is completely uninitiated in the field. The amount of time needed to prepare varies from person to person. However, it is recommended to enroll in an IAS coaching institute to gain maximum benefits while preparing.