How to Prepare Economy for IAS Exam

 Civil Services Examination is one of the most prestigious examinations in India. Every year more than 10 Lakh aspirant apply for this examination and only 500-1000 aspirant taste the sweetness of the success. This examination is conducted in 3 stages: Preliminary Examination, Mains Examination and Interview.

Prelims is the most important stage of this examination as it is an eliminatory round where most of the aspirants are disqualified and almost 10,000 aspirants qualify for the Mains examination. To qualify the Prelims round, one has to master all the seven pillars of the syllabus of Prelims. Economics is one of the most important subjects for UPSC  Prelims exam. In fact, Economics, along with History, Geography and Polity forms the major portion of the Prelims exam.

Economics as a subject for IAS Exam

Economics in simple words means, ‘the distribution of the resources in judicially and equitable way. As the resources are less and the population is large so economics may be further defined as the distribution of these scarce resources to the population’. 

Economics is considered as the gateway to the UPSC Mains examination hall. The question trend since 2011 shows that a vast number of questions were asked from Economics. It is an interesting subject and as future administrators, UPSC aspirants need to understand the basics of economics, terminologies, definitions frequently in news, basic banking operations, budget, etc. This subject is intricately linked to current affairs.

Before 2011, Economics questions were more of traditional nature, where aspirants were able to fetch good marks by just reading and remembering facts from some standard textbooks of the subject, but the nature of the game has now changed. Now, questions are not directly asked from the book but they are derived from the concept of the books and mostly the nature of the derived questions revolves around contemporary topics. This year too, most questions from Economics were not factual but linked to recent events. 

Economics Preparation for UPSC - Two-step process

It is essential to understand and plan your subject preparation wisely. The best way to structure it is to divide the syllabus accordingly. Economics preparation is mainly 2 step process. Conceptual Understanding and Analysis based topics.

Step 1- Conceptual understanding

Reading the Economics section of the Hindu Newspaper and a standard textbook then understanding the terms like GDP, Repo Rate, Reverse REPO Rate, CRR, SLR, Inflation, Deflation, Growth, Inclusive Growth, Financial Inclusion, Development and so on. One should be well-versed with the definitions of these terms. there have been instances when UPSC Prelims Paper had questions asking the of the same.

Step 2- Conceptual Analysis of the understanding

Application of the concepts is utmost important. In this step, you have to apply what you have learned in Step 1.

For Example- You read in the Hindu that the RBI has reduced the REPO Rate then you must storm your brain about its effect on the economy. What are the other tools of the RBI which they use to correct the economy?

If the foreign reserve of the country is increasing then what will be its effect on the economy and if inflation will arise the how RBI will counter this inflation. 

Economy Study Material and Books for IAS Exam

• Indian Economic Development Class XI NCERT, Class XII NCERT(Macroeconomics): These are the basic books and must be read twice to get some fundamental understanding of Economy. 

For those who have studied Economics in the academics or have some concept of economics, then an advanced book to read would be 

• Indian Economy: For UPSC Civil Services & Other State PSC Examinations by Ramesh Singh or
• The Indian Economy-by Sanjiv Verma

Both books are an excellent ready reckoner.  Previously many questions were asked directly in the UPSC Prelims from these books. Sanjeev Verma's book must be read as a whole but the selective reading from the Ramesh Singh's book will garner good result. Some important chapters in these books are - Agriculture, Banking, Reforms, Inflation and Economic Planning. 

Economy as a subject also has good coverage of International Financial Institutions like World Bank, IMF and WTO.

Questions in this area will be very conceptual and a thorough understanding of concepts is required. This can be done by covering the basics as well as regularly updating oneself with the economics section of The Hindu.

Along with the standard books and the newspaper, one has to cover important government documents like The Economic Survey, General Budget and selective reading of ARC report and NITI Aayog report. 

P.S.- While reading the book don't try to memorize the numerical figures, graphs and mathematical equations. As it is not important for the UPSC Examination, just try to understand the concepts and learn to apply them. 

How To Prepare Economy for UPSC Mains

The Indian Economy for Prelims and Mains needs different approaches. The G.S paper-3 consists of the major parts of the economics. Mains syllabus specifically mentions about some aspects of Indian Economy like issues relating to planning, mobilization of resources, Public Distribution System, Land reforms, Liberalization, Infrastructure, Investment models, Growth development and employment, Government Budgeting, Cropping patterns, Food processing etc.

If you will examine the syllabus then you will find that UPSC Exam likely tests the candidate's basic understanding of all relevant issues, ability to analyze and to take a view on the conflicting socio-economic goals and demands. The candidate must give relevant, meaningful and succinct answers.

Another important aspect of Mains Preparation is Test Series and Answer Writing. This practice alone will enhance your UPSC Score by a lot. After you have covered your syllabus once, you should enrol in a Test Series and start practising answer writing. 

DO's & DONT's of Economy Preparation for IAS Online course

DO's

• Always keep syllabus with you and try to memorize it.
• Link the News Paper Article with the syllabus and make notes of the important article in your own words and try to revise it as many times as you can.
• Make notes of the Hindu editorial related to economy, agriculture etc.
• Answer writing of the previous year question papers.
• Before all these, you must clear all your concepts through the steps which have been already described in this article. It is always advised that the preparation of the Prelims and Mains should be synchronized and should be prepared together.

DONT's

All Government of India reports need not be thoroughly studied line by line. Only reading of the conclusion part is advised.

All recommendation of the committee should not be memorized, but the recommendation of the committee on the burning topics must be read thoroughly. Ex- Ashok Dalwai committee's report on doubling farmer's income.

Be consistent with your preparation. Consistency and hard work are your best friends.

All The Best!