Indian Economic Service Syllabus


Note- Please Verify and check.

The standard of papers in General English and General Studies will be such as may be expected of a graduate of an Indian University.

The standard of papers in the other subjects will be that of the Master’s degree examination of an Indian University in the relevant disciplines. The candidates will be expected to illustrate theory by facts, and to analyse problems with the help of theory. They will be expected to be particularly conversant with Indian problems in the field of Economic/Statistics. .

General English .

Candidates will be required to write an essay in English. Other questions will be designed to test their understanding of English and workmanlike use of words. Passages will usually be set for summary or precis. .

General Studies.

General Knowledge including knowledge of current events and of such matters of every day observation and experience in their scientific aspects as may be expected of an educated person who has not made a special study of any scientific subject. The paper will also include questions on Indian Polity including the political system and the Constitution of India, History of India and Geography of a nature which the candidate should be able to answer without special study..

General Economics-I .

1. Theory of Consumer’s Demand: Cardinal Utility analysis, Indifference Curve analysis – Income and Substitution Effects, the Slutsky theorem – revealed Preference approach..

2. Theory of Production – Factors of Production – Production Functions – forms of Production Function: Cobb-Douglas, CES and Fixed Co-efficient type – Laws of returns – Returns to scale and returns to a factor – Partial equilibrium versus general equilibrium approach – Equilibrium of the firm and the Industry..

3. Theory of Value: Pricing under various forms of market organisation like perfect competition, monopoly, monopolistic competition and oligopoly. Public Utility Pricing: Marginal cost pricing, Peak load pricing..

4. Theory of Distribution: Macro-distribution theories of Ricardo, Marx, Kalecki, Kaldor-Neo-classical approach: Marginal productivity theory of determination of factor prices – factor shares and the ‘adding up’ problem – Euler’s theorem – pricing of factors under imperfect competition..

5. Welfare Economics – inter-personal comparison and aggregation problem, divergence between social and private welfare, compensation principle, Pareto optimality, Social choice and other recent schools, including Coase and Sen..

6. Concept of national income and social accounting – measurement of national income – Inter-relationship between three measures of national income in the presence of the Government sector and international transactions. Measuring Economic Welfare – socio-economic indicators approach: PQLI and H.D. Index.

7. Theory of Employment, Output and Inflation – the Classicial and neo-classical approaches – Keynesian theory of Employment – Post-Keynesian developments – the Inflationary gap – Demand-Pull versus Cost-Push Inflation – the Phillip’s Curve and its policy implications.

8. Mathematical Methods in Economics: Derivatives – basic rules of differentiation and its applications to economic functions- Optimisation (concept) – Matrices and their applications in Economics, Input-Output model (concept), Linear Programming and its applications.


1. Concept of economic growth and development and their measurement – Characteristics of less developed countries (LDCs) and obstacles to their development – growth, poverty and income distribution – Theories of growth: Classicial Approach: Adam Smith, Marx and Schumpeter – Neo-classical Approach: Robinson, Solow, Kaldor and Harrod-Domar – Theories of Economic Development: Rostow, Rosenstein-Rodan, Nurkse, Hirschman, Leibenstein and Arthur Lewis, Amin and Frank (Dependency school); respective role of the State and the market.

2. International Economics: Gains from International Trade, terms of trade, trade policy, international trade and economic development – Theories of International Trade: Ricardo, Haberler, Heckscher-Ohlin and Stolper-Samuelson – Theory of Tariffs – Regional Trade Arrangements.

3. Balance of Payments: Disequilibrium in Balance of Payments, Mechanism of Adjustments, Foreign Trade Multiplier, Exchange Rates, Import and Exchange Controls and Multiple Exchange Rates. 4. Global Institutions: UN agencies; World Bank, IMF and WTO, Multinational Corporations.

5. Money and Banking: its functions and value-quantity Theory of Money: Cash Transaction Approach and the Cash Balances Approach, Friedman’s Restatement of the Quantity Theory of Money – the instruments of monetary control – the neutrality of money – the money multiplier.

6. Statistical and Econometric methods: averages, dispersions, correlation and regression, time series, index numbers, sampling and survey methods, testing of hypotheses, simple non-parametric tests, drawing of curves based on various linear and non-linear functions; least square methods, other multivariate analysis (only concepts and interpretation of results); ANOVA, factor analysis, principal component analysis, discriminant analysis. Income distributions: Pareto Law of distribution – log-normal distrubution – measurement of income inequality – Lorenz Curve and Gini co-efficient.


1. Environmental Economics: Club of Rome, Founex report, Stockholm and Rio Earth summit reports, Convention on Biodiversity, Montreal Protocol on CFC, global warming; externalities, public goods, economic implication of various types of environmental degradation – air, noise, water pollution and exhaustion of non-renewable resources; resource accounting, biological wealth and its depletion or accretion as a part of GDP estimates and sustainable development; remedies : regulations, taxes, market based solutions such as privatisation and pollution permits.

2. Urbanisation and migration – Lewis, Todaro; informal sector, urban labour market, urban poverty. 3. Project Appraisal: Criteria for project choices: Internal rate of return, net present value and benefit-costs ratio – social rate of discount – shadow prices of capital, unskilled labour and foreign exchange. Use of project appraisal methods in India.

4. Financial and Capital Markets: finance and economic development -financial markets – stock market, gilt market, foreign exchange market – Banking and insurance.

5. Fiscal policy and its objectives – limitations of fiscal policy – theories of taxation and expenditure – objectives and effects of public expenditure – effects and incidence of taxation – deficit financing – theory of public debt, debt management, complementarity of monetary and fiscal policy with debt.

6. State, Market and Planning: concept and types of planning – rationale of planning in a developing economy – limitations of planning, economics of regulations, decentralised planning.


1. History of development and planning – alternative development strategies – goal of self reliance based on import substitution and the post-1991 globalisation strategies based on stabilisation and structural adjustment packages.

2. (a) Decentralised Planning: Panchayat experience-constitutional obligations, Balwantrai Mehta Committee, Ashok Mehta Committee and other reports, financial aspects of 73rd and 74th constitutional amendments.

(b) Union-State financial relations: Constitutional provisions relating to fiscal and financial powers of the states, financal aspect fo Sarkaria Commission Report, Finance Commissions and their formulae for sharing taxes.

3. Poverty, Unemployment and Human Development during plan period – Appraisal of Government measures – India’s human development record in global perspective.

4. Agriculture and Rural Development: Strategies including those relating to technologies and institutions: land relations and land reforms, rural credit, modern farm inputs and marketing – price policy and subsidies; commercialisation and diversification. Rural development programmes including poverty alleviation programmes: development of economic and social infrastructure.

5. India’s experience with Urbanisation and Migration – Different types of migratory flows and their impact on the economies of their origin and destination, the process of growth of urban settlements: urban strategies. 6. Industry: Strategy of industrial development – Industrial Policy Reform; Reservation Policy relating to small scale industries. Sources of industrial finances – bank, share market, insurance companies, pension funds, non-banking sources and foreign direct investment; role of foreign capital for direct investment and portfolio investment. Public sector reform, privatisation and disinvestment.

7. Labour: Employment, unemployment and under-employment – industrial relations and labour welfare – strategies for employment generation – Urban labour market and informal sector employment; report of National Commission on labour, Social issues relating to labour e.g. Child labour, Bonded labour. 8. Foreign trade: Salient features of India’s foreign trade – composition, direction and organisation of trade: recent changes in trade policy; Balance of payments, tariff policy, exchange rate and WTO requirements. 9. Money and Banking: Organisation of India’s money market – changing roles of the Reserve Bank of India, commercial banks, development finance institutions, foreign banks and non-banking financial institutions. 10. Budgeting and Fiscal Policy: Tax, expenditure, budgetary deficits, debt and fiscal reforms. Black money and Parallel economy in India – definition, estimates, genesis, consequences and remedies.

“……..It was said of Thomas alva edision that he was indeed hard to teach. Whatever he learned, he learned in his own way… though his mother inspired him; no one ever taught him anything; he taught himself. The heart of matter is that each has to choose his own way to project his distinctive personality. Books and study clubs could only illumine your path, but it is you who have to make the ultimate effort tapping all your hidden potential and once you start doing it your self you will be amazed to discover the inexhaustible energy and talent hidden in you. The goal is not only the examination at hand but the untroden realms beyond that you will be exploring in the years ahead. Successful are those who let their thinking and action go together………………….” 

Wish you all the best

Zulfi Sheth


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