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Economics (Optional) Syllabus for Preliminary Examination
1) Micro-economics : (a) Production : Agents of Production; Costs and
Supply; Isoquants (b) Consumption and Demand; Elasticity concept (c) Market
Structure and concepts of equilibrium; (d) Determination of prices; (e)
Components and Theories of Distribution
A D V E R T I S E M E N T
(f) Elementary concepts of Welfare
economics : Pareto-optimality-Private and social products-consumers surplus.
2) Macro-economics : (a) National Income concepts; (b) Determinants of
National Income Employment (c) Determinants of consumption, savings and
Investment (d) Rate of Interest and its determination (e) Interest and profit.
3) Money, Banking and Public Finance : (a) Concepts of Money and measures
of money supply; velocity of money (b) Banks and credit creation; Banks and
portfolio management. (c) Central Bank and control over money supply (d)
Determination of the price level. (e) Inflation, its causes and remedies. (f)
Public, Finance-Budgets-Taxes and non-tax revenues-Types of Budget deficits.
4) International Economics : (a) Theories of International
Trade-comparative costs-Heckscher-Ohlin-Gains from Trade-Terms of Trade. (b)
Free Trade and Protection. (c) Balance of Payments accounts and Adjustment. (d)
Exchange rate under free exchange markets. (e) Evolution of the International
Monetary System and World Trading order-Gold Standard-the Brettonwoods system.
IMF and the World Bank and their associates. Floating rates-GATT and WTO
(5) Growth and Development : (a) Meaning and measurement of growth;
Growth, distribution and Welfare; (b) Characteristics of underdevelopment; (c)
Stages of Development; (d) Sources of growth-capital, Human capital, population,
productivity, Trade and aid, non-economic factors; growth Strategies, (e)
Planning in a mixed economy-Indicative planning-Planning and growth.
(6) Economic Statistics : Types of averages-measures of
dispersion-correlation-Index numbers; types, uses and limitations.
1. Main features; Geographic size-Endowment of natural resources, Population;
size, composition quality and growth trend-Occupational distribution-Effects of
British Rule with reference to Drain theory and Laissez Faire policy.
2. Major problems, their dimensions, nature and broad causes; Mass
poverty-Unemployment and its types-Economics effects of population
pressure-Inequality and types thereof-Low productivity and low per capita
income, Rural-urban disparities-Foreign Trade and payments imbalances. Balance
of Payments and External Debt- Inflation, and parallel economy and its
3. Growth in income and employment since Independence-Rate, Pattern, Sectoral
trends-Distributional Changes-Regional disparities.
4. Economic Planning in India : Major controversies on planning in
India-Alternative strategies-goals and achievements, shortfalls of different
plans-planning and the Market.
5. Broad Fiscal, monetary, industrial trade and agricultural
policies-objectives, rationale, constraints and effects.
Economics (Optional) Syllabus for Main Examination
1. Ricardian, Marshallian and Walrasain approaches to price determination. Types
of Markets and price determination. Criteria or Welfare improvement. Alternate
theories of distribution.
2. Functions of money-Measurement of price level changes-Money and real
balances-Monetary standards-High-powered money and the Quantity theory of money,
its variants and critiques thereof-Demand for and supply of money-The money
multiplier. Theories of determination of interest rate-Interest and
prices-Theories of inflation and control of inflation.
3. Full employment and Says' Law-underemployment equilibrium-Keynes' Theory of
employment (and income) determination-Critiques of Keynesian Theory.
4. The modern monetary system-Banks, non-bank financial intermediaries, Discount
House, and Central Bank. Structure of Money and financial markets and control.
Money market instruments, bills and bonds. Real and nominal interest rates.
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.
5. Public finance and its role in market economy in stabilisation, supply
stability, allocative efficiency, distribution and development. Sources of
revenue-Forms of Taxes and subsidies, their incidence and effects; Limits to
taxation, loans, crowding-out effects, and limits to borrowing. Types of budget
deficits-Public expenditure and its effects.
6. International Economics
(i) Old and New theories of International Trade.
a) Comparative advantage, Terms of trade and offer curve.
b) Product cycle and Strategic trade theories.
c) "Trade as an engine of growth" and theories of underdevelopment in an open
(ii) Forms of protection.
(iii) Balance of Payments Adjustments Alternative Approaches.
a) Price versus income, income adjustments under fixed exchange rates.
b) Theories of policy mix.
c) Exchange rate adjustments under capital mobility.
d) Floating Rates and their implications for developing countries; Currency
(iv) (a) IMF and the World Bank.
(c) Trade Blocks and monetary unions.
7. Growth and development.
(i) Theories of growth : Classical and neo-classical theories; The Harrod model;
economic development under surplus Labour; wage-goods as a constraint on growth;
relative importance of physical and human capitals in growth; innovations and
development; Productivity, its growth and source of changes thereof. Factors
determining savings to income ratio and the capital-out put ratio.
(ii) Main features of growth : Changes in Sectoral compositions of income;
Changes in occupational distribution; changes in income distribution; changes in
consumption levels and patterns; changes in savings and investment and in
pattern of investment. Case for and against industralization. Significance of
agriculture in developing countries.
(iii) Relation between state, planning and growth, Changing roles of market and
plans in growth economic policy and growth.
(iv) Role of foreign capital and technology in growth. The significance of
(v) Welfare indicators and measures of growth-Human development indices-The
basic needs approach.
(vi) Concept of sustainable development; convergence of levels of living of
developed and developing countries; meaning of self-reliance in growth and
I. Evolution of the Indian Economy till independence. The Colonial Heritage :
Land System & Agriculture, Taxes, Money and credit, Trade, Exchange Rate, the
"Drain of Wealth controversy" of late 19th Century. Randade's critique of
Laissez-Faire; Swadeshi movement; Gandhi and Hind Swaraj.
II. Indian Economics in Post-Independent Era-Contributions of Vakil, Gadgil and
Rao. National and percapita Income; Patterns, Trends, Aggregate and
sectoral-composition and changes therein. Broad factors determining National
Income and its distribution; Measures of poverty. Trends in below poverty-line
III. Employment : Factors determining employment in short and long periods. Role
of capital, wage-goods, wage-rate and technology. Measures of unemployment.
Relation between income, poverty and employment, and issues of distribution and
Agriculture-Institutional set-up of land system size of agricultre holdings and
efficiency-Green Revolution and technological changes-Agricultural prices and
terms of trade-Role of public distribution and farm-subsidies on agricultural
prices and production. Employment and poverty in agriculture-Rural
wages-employment schemes-growth experience-land reforms. Regional disparities in
agricultural growth. Role of Agriculture in export.
IV. Industry : Industrial system of India : Trends in Composition and growth.
Role of public and private sectors, Role of small and cottage industries. Indian
industrial Strategy-Capital versus consumer goods, wage-goods versus luxuries,
capital-intensive versus labour-intensive techniques, import-substituting versus
export promotion. Sickness and high-cost Industrial policies and their effects.
Recent moves for liberalisation and their effects on Indian industry.
V. Money and banking : The monetary institutions of India: Factors determining
demand for and supply of money. Sources of Reserve money-money
multiplier-Techniques of money supply regulation under open economy. Functioning
of money market in India. Budget deficit and money supply. Issues in Reform of
Monetary and Banking Systems.
VI. Index numbers of price levels-Course of Price level in post-Independence
period-sources and causes of inflation-role of monetary and supply factors in
price level determination-policies towards control of inflation. Effects of
inflation under open economy.
VII. Trade, balance of payments and exchange : Foreign trade of India;
composition and direction shifts in trade policy from import substituion to
export promotion. Impact of liberalisation on pattern of trade. India's external
Borrowings-the Debt problem. Exchange rate of the rupee; Devaluations,
depreciations and their effects on balance of payments-Gold imports and Gold
policy-convertibility on current and capital accounts-rupee in an open economy.
Integration of Indian economy with world economy-India and the WTO.
VIII. Public Finance and Fiscal Policy : Characteristics of and trends in
India's Public Finance-Role of Taxes, (direct and indirect) and subsidies-Fiscal
and monetary deficits-public expenditures and their significance-Public Finance
and Inflation-Limiting Government's debt-Recent fiscal policies and their
IX. Economic Planning in India-Trends in Savings and investment-Trends in
Savings to Income and capital-output ratios-Productivity, its sources, growth
and trends-growth versus distribution-Transition from Central Planning to
indicative planning-relation between Market and Plan-strategies for Growth,
social justice and Plans. Planning and increasing the growth rate.