UPSC IES Syllabus : Indian Economic & Statistical Service Examination 2024

SECTION-I

The examination shall be conducted according to the following plan—
Part I-Written examination carrying a maximum of 1000 marks in the subjects as
shown below.
Part II-Viva voce of such candidates as may be called by the Commission carrying a
maximum of 200 marks.

PART-I

The subjects of the written examination under Part-I, the maximum marks allotted to
each subject/paper and the time allowed shall be as follows :

Indian Economic Service
Sl. Subject Maximum Time
No. Marks Allowed

General English :

Essay Writing, Understanding of English Language and Vocabulary, Summary of Precis Writing, Passages

General Studies

General Knowledge, Geography, Current Affairs, Current Events, and History of India

General Economics-I

Part A:

1. Theory of Consumer’s Demand—Cardinal utility Analysis: Marginal utility and
   demand, Consumer’s surplus, Indifference curve, Analysis and utility function, Price
   income and substitution effects, Slutsky theorem and derivation of demand curve, Revealed
   preference theory. Duality and indirect utility function and expenditure function, Choice
   under risk and uncertainty. Simple games of complete information, Concept of Nash
   equilibrium.
2. Theory of Production: Factors of production and production function. Forms of
   Production Functions: Cobb Douglas, CES and Fixed coefficient type, Translog production
   function. Laws of return, Returns to scale and Return to factors of production. Duality and
   cost function, Measures of productive efficiency of firms, technical and allocative efficiency.
   Partial Equilibrium versus General Equilibrium approach. Equilibrium of the firm and
   industry.
3. Theory of Value: Pricing under different market structures, public sector pricing,
   marginal cost pricing, peak load pricing, cross-subsidy free pricing and average cost pricing.
   Marshallian and Walrasian stability analysis. Pricing with incomplete information and
   moral hazard problems.
4. Theory of Distribution: Neo classical distribution theories; Marginal productivity theory
   of determination of factor prices, Factor shares and adding up problems. Euler’s theorem,
   Pricing of factors under imperfect competition, monopoly and bilateral monopoly. Macrodistribution theories of Ricardo, Marx, Kaldor, Kalecki.
5. Welfare Economics: Inter-personal comparison and aggression problem, Public goods
   and externalities, Divergence between social and private welfare, compensation principle.
   Pareto optimality. Social choice and other recent schools, including Coase and Sen.

PART B : Quantitative Methods in Economics

1. Mathematical Methods in Economics: Differentiation and Integration and their
   application in economics. Optimisation techniques, Sets, Matrices and their application in
   economics. Linear algebra and Linear programming in economics and Input-output model
   of Leontief.
2. Statistical and Econometric Methods: Measures of central tendency and dispersions,
   Correlation and Regression. Time series. Index numbers. Sampling of curves based on
   various linear and non-linear function. Least square methods and other multivariate
   analysis (only concepts and interpretation of results). Analysis of Variance, Factor analysis,
   Principle component analysis, Discriminant analysis. Income distribution: Pareto law of
   Distribution, longnormal distribution, measurement of income inequality. Lorenz curve and
   Gini coefficient. Univariate and multivariate regression analysis. Problems and
   remedies of Hetroscedasticity, Autocorrelation and Multicollnearity.

General Economics-II

1. Economic Thought: Mercantilism Physiocrats, Classical, Marxist, Neo-classical,
   Keynesian and Monetarist schools of thought.
2. Concept of National Income and Social Accounting: Measurement of National
   Income, Inter relationship between three measures of national income in the presence of
   Government sector and International transactions. Environmental considerations, Green
   national income.
3. Theory of employment, Output, Inflation, Money and Finance: The Classical
   theory of Employment and Output and Neo classical approaches. Equilibrium, analysis
   under classical and neo classical analysis. Keynesian theory of Employment and output.
   Post Keynesian developments. The inflationary gap; Demand pull versus cost push
   inflation, the Philip’s curve and its policy implication. Classical theory of Money, Quantity
   theory of Money. Friedman’s restatement of the quantity theory, the neutrality of money.
   The supply and demand for loanable funds and equilibrium in financial markets, Keynes’
   theory on demand for money. IS-LM Model and AD-AS Model in Keynesian Theory.
4. Financial and Capital Market: Finance and economic development, financial
   markets, stock market, gift market, banking and insurance. Equity markets, Role of
   primary and secondary markets and efficiency, Derivatives markets; Future and options.
5. Economic Growth and Development: concepts of Economic Growth and
   Development and their measurement: characteristics of less developed countries and
   obstacles to their development – growth, poverty and income distribution. Theories of
   growth: Classical Approach: Adam Smith, Marx and Schumpeter- Neo classical approach;
   Robinson, Solow, Kaldor and Harrod Domar. Theories of Economic Development, Rostow,
   Rosenstein-Roden, Nurske, Hirschman, Leibenstien and Arthur Lewis, Amin and Frank
   (Dependency scool) respective role of state and the market. Utilitarian and Welfarist
   approach to social development and A.K. Sen’s critique. Sen’s capability approach to
   economic development. The Human Development Index. Physical quality of Life Index and
   Human Poverty Index. Basics of Endogenous Growth Theory.
6. International Economics: Gains from International Trade, Terms of Trade, policy,
   international trade and economic development- Theories of International Trade; Ricardo,
   Haberler, Heckscher- Ohlin and Stopler- Samuelson- Theory of Tariffs- Regional Trade
   Arrangements. Asian Financial Crisis of 1997, Global Financial Crisis of 2008 and Euro
   Zone Crisis- Causes and Impact.
7. Balance of Payments: Disequilibrium in Balance of Payments, Mechanism of
   Adjustments, Foreign Trade Multiplier, Exchange Rates, Import and Exchange Controls and
   Multiple Exchange Rates. IS-LM Model and Mundell- Fleming Model of Balance of
   Payments.
8. Global Institutions: UN agencies dealing with economic aspects, role of
   Multilateral Development Bodies (MDBs), such as World Bank, IMF and WTO,
   Multinational Corporations. G-20.

General Economics-III

1. Public Finance—Theories of taxation: Optimal taxes and tax reforms, incidence of
   taxation. Theories of public expenditure: objectives and effects of public expenditure, public
   expenditure policy and social cost benefit analysis, criteria of public investment decisions,
   social rate of discount, shadow prices of investment, unskilled labour and foreign exchange.
   Budgetary deficits. Theory of public debt management.
2. Environmental Economics—Environmentally sustainable development, Rio process
   1992 to 2012, Green GDP, UN Methodology of Integrated Environmental and Economic
   Accounting. Environmental Values: Users and non-users values, option value. Valuation
   Methods: Stated and revealed preference methods. Design of Environmental Policy
   Instruments: Pollution taxes and pollution permits, collective action and informal regulation
   by local communities. Theories of exhaustible and renewable resources. International
   environmental agreements, RIO Conventions. Climatic change problems. Kyoto protocol,
   UNFCC, Bali Action Plan, Agreements up to 2017, tradable permits and carbon taxes.
   Carbon Markets and Market Mechanisms. Climate Change Finance and Green Climate
   Fund.
3. Industrial Economics—Market structure, conduct and performance of firms, product
   differentiation and market concentration, monopolistic price theory and oligopolistic
   interdependence and pricing, entry preventing pricing, micro level investment decisions and
   the behaviour of firms, research and development and innovation, market structure and
   profitability, public policy and development of firms.
4. State, Market and Planning—Planning in a developing economy. Planning regulation
   and market. Indicative planning. Decentralised planning.

Indian Economics

1. History of development and planning— Alternative development strategies—goal
   of self-reliance based on import substitution and protection, the post-1991 globalisation
   strategies based on stabilisation and structural adjustment packages: fiscal reforms,
   financial sector reforms and trade reforms.
2. Federal Finance—Constitutional provisions relating to fiscal and financial powers of
   the States, Finance Commissions and their formulae for sharing taxes, Financial aspect of
   Sarkaria Commission Report, financial aspects of 73rd and 74th Constitutional
   Amendments.
3. Budgeting and Fiscal Policy—Tax, expenditure, budgetary deficits, pension and
   fiscal reforms, Public debt management and reforms, Fiscal Responsibility and Budget
   Management (FRBM) Act, Black money and Parallel economy in India—definition,
   estimates, genesis, consequences and remedies.
4. Poverty, Unemployment and Human Development—Estimates of inequality and
   poverty measures for India, appraisal of Government measures, India’s human development
   record in global perspective. India’s population policy and development.
5. Agriculture and Rural Development Strategies— 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 and New Rural Employment Guarantee Scheme.
6. 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 development strategies.
7. Industry: Strategy of industrial development— Industrial Policy Reform;
   Reservation Policy relating to small scale industries. Competition policy, 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.
8. Labour—Employment, unemployment and underemployment, industrial relations
   and labour welfare— strategies for employment generation—Urban labour market and
   informal sector employment, Report of National Commission on Labour, Social issues
9. relating to labour e.g. Child Labour, Bonded Labour International Labour Standard and its impact.
10. Foreign trade—Salient features of India’s foreign trade, composition, direction and
    organisation of trade, recent changes in trade, balance of payments, tariff policy, exchange
    rate, India and WTO requirements. Bilateral Trade Agreements and their implications.
11. Money and Banking—Financial sector reforms, 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, Indian capital
    market and SEBI, Development in Global Financial Market and its relationship with Indian
    Financial Sector. Commodity Market in India-Spot and Futures Market, Role of FMC.
12. Inflation—Definition, trends, estimates, consequences and remedies (control):
    Wholesale Price Index. Consumer Price Index: components and trends.