IAS Economics Optional Course

In the Civil Services Examination conducted by UPSC, the Economics Optional consists of two papers, conducted over two consecutive days.

Paper I covers:
Microeconomics, Macroeconomics, Development Economics, International Trade, Public Economics, and Money & Banking.
Paper II focuses entirely on the Indian Economy, including its development, growth experiences, and current policy challenges. It also includes, some part of Economic History

The standard of both papers will be at the level of a BA degree in any subject from an Indian University. Candidates will be expected to demonstrate strong theoretical understanding, support their answers with relevant data and case studies, and apply economic concepts to real-world issues, particularly in the Indian context. Analytical clarity, precision in arguments, and familiarity with contemporary economic issues and government policies will be essential for scoring well in this optional subject.

Syllabus of IAS Economics Optional

Paper 1 (Parts 1, 2, 3)

Advanced Micro economics
Marshallian and Walrasian Approaches to Price determination
Alternative Distribution Theories
- Ricardo
- Kaldor
- Kalecki
Markets Structure
- Monopolistic Competition,
- Duopoly,
- Oligopoly
Modern Welfare Criteria :
- Pareto Hicks and Scitovsky,
- Arrow’s Impossibility Theorem,
- A. K. Sen’s Social Welfare Function.
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 Structure
Money Banking and Finance
(A) Demand for and Supply of Money
- Money Multiplier
- Quantity Theory of Money
  - (Fisher,
  - Pigou
  - and Friedman)
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
(B) 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.

Paper 1 ( Parts 4 &5)

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 underdevelopment in an open economy.
(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 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 talk
Growth and Development
(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.
(b) 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
(c) Economic Development and International Trade and Investment, Role of Multinationals.
(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 development.

Paper 2 (Parts 1 & 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.

Indian Economy after Independence :
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 therein.
(v) Broad factors determining National Income and distribution,
- Measures of poverty,
- Trends in poverty and inequality.

Paper 2 (Part 3)

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 multinationals
(iii) New Economic Policy and Trade:
- Intellectual property rights :
  - Implications of TRIPS,
  - TRIMS,
  - GATS
  - new EXIM policy.
(iv) New Exchange Rate Regime:
- Partial and full convertibility,
- Capital account convertibility.
(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 Constitutional amendments.
(viii) New Economic Policy and Employment:
- Employment and poverty
- Rural wages,
- Employment Generation,
- Poverty alleviation schemes,
- New Rural, Employment Guarantee Scheme.

IAS Economics Optional - Past year papers

Paper 1

Paper 2

Frequently asked questions

Is economics a good optional for UPSC?

Yes, Economics is generally considered a good optional subject for the UPSC civil services exam, particularly if you have an analytical mindset and are comfortable with concepts like graphs, data interpretation, and economic theories. It offers several advantages, including a good overlap with the General Studies (GS) papers, especially GS Paper III, and scoring potential for those with a strong grasp of the subject.

Is economics scoring in UPSC?

Economics is a technically rich but rewarding optional subject in the UPSC Civil Services Examination. It’s best suited for candidates with a background in economics, commerce, management, engineering, or those with a strong interest in understanding India’s economy in-depth.

IAS Economics Optional Coaching

₨ 38,000

Live Classes
Past Years Discussion
Recordings
Doubts Clearance

₨ 48,000

Live Classes
Past Years Discussion
Recordings
Doubts Clearance
Test Series : 12 full length tests

Popular

₨ 12,000

12 full length tests
3 tests for each paper
Model Answers

Toppers Videos

FAQs about IAS Economics Optional Coaching

Who This Course Is For

This course is designed for UPSC aspirants who have chosen Economics as their Optional subject in the Civil Services Mains Examination. It is ideal for:

Economics graduates or postgraduates looking for a structured course
IES aspirants who are also appearing for the Civil Services Examination also

What the Course Covers

The course offers full coverage of both papers of the Economics Optional syllabus:

Paper I includes Microeconomics, Macroeconomics, International Economics, and Public Finance
Paper II includes the Indian Economy since Independence, Growth Models, Planning, Liberalisation, and Recent Issues

You will be taught through a structured, topic-wise approach, with past year questions integrated into each topic.

Why Choose This Course

Each live class is also recorded. These Recorded lectures are available 24/7 for one full year from the date of enrollment
You can learn at your own pace. Although, we know, that more clarity will come if you attend live classes regularly and make notes alongside us
Each lecture outlines what to read, where to focus, and how to connect it with UPSC-style questions
You will learn how to write well-structured answers, even for open-ended or abstract questions.
We will be doing Past years questions in the classes

Mode of Delivery

The course is fully online
All live lectures are recorded and remain accessible for 12 months from the date of purchase
Reference materials and readings are also suggested alongside classes
Past years questions will be discussed by instructor in the classes

Coaching Philosophy

No course can replace discipline or consistent effort. However, this course will help you:

Save time by following a structured approach
Focus on exam-relevant content
Build clarity on challenging concepts
Understand the expectations of the UPSC Economics Optional papers

You are encouraged to start by watching the demo lectures and see if the approach works for you.

Course Fee

IAS Economics Optional (Paper I & II): ₹38,000
IAS Economics Optional (Paper I & II) plus test series: ₹48,000
IAS Economics Optional Test Series :₹12,000
Access duration: 1 year from the date of enrollment

How to Enroll

Go to registration page. Email a request for demo lectures to nishantmehra01@gmail.com
Watch the demo sessions and evaluate the course
If satisfied, confirm your enrollment by email
Payment options will be shared with you
Course access begins for 365 days upon receipt of payment