State PSC (e.g. BPSC / UPPSC / MPSC) Indian Economy and Development Syllabus

Indian Economy and Development syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Indian Economy and Development in State PSC (e.g. BPSC / UPPSC / MPSC), not a summary of it.

1. 1

   Basics of Indian Economy

   4 topics

   • National Income and Accounting
     • GDP, GNP, NNP and deflators
     • Methods of measuring national income
   • Sectors of the Economy and Their Contribution
   • Economic Planning and NITI Aayog
   • Inflation: Types, Causes and Control
2. 2

   Money, Banking and Public Finance

   5 topics

   • Money Supply and Monetary Policy
     • RBI tools: CRR, SLR, repo and reverse repo
   • Banking System and Financial Inclusion
   • Fiscal Policy and Budget
     • Types of deficits and FRBM Act
   • Taxation and GST
   • Capital Markets and Financial Regulators
3. 3

   Growth, Development and Social Sectors

   4 topics

   • Poverty, Unemployment and Inequality
   • Human Development Indicators
   • Agriculture and Food Security
     • MSP, PDS and farm subsidies
   • Industrial Policy, MSMEs and Make in India
4. 4

   External Sector and Contemporary Economy

   4 topics

   • Balance of Payments and Foreign Trade
   • Exchange Rate and Foreign Investment
   • International Economic Organizations
     • IMF, World Bank and WTO
   • Economic Reforms Since 1991
5. 5

   State Economy

   4 topics

   • Structure and Sectoral Composition of the State Economy
   • State Budget, Revenue Sources and Expenditure
   • State-Level Schemes and Development Programmes
   • Infrastructure, Industry and Employment in the State

Indian Economy and Development flashcards for State PSC (e.g. BPSC / UPPSC / MPSC)

21 of 51 cards from the Indian Economy and Development deck — real questions with worked answers.

1. What is the difference between GDP and GNP?

   GDP (Gross Domestic Product) is the value of all final goods and services produced within a country's domestic territory. GNP = GDP + Net Factor Income from Abroad (income earned by residents abroad minus income earned by foreigners domestically).

2. How is National Income (NNP at factor cost) derived from GNP?

   NNP at factor cost = GNP at market price − Depreciation − Net Indirect Taxes (Indirect Taxes − Subsidies). NNP at factor cost is the actual measure of National Income.

3. What are the three methods of measuring national income?

   Product/Value-Added method, Income method (rent + wages + interest + profit), and Expenditure method (C + I + G + (X − M)). All three should give the same result.

4. Which organization is responsible for estimating national income in India?

   The National Statistical Office (NSO), under the Ministry of Statistics and Programme Implementation (MoSPI). Earlier this was done by the Central Statistical Organisation (CSO).

5. What is the difference between nominal GDP and real GDP?

   Nominal GDP is measured at current market prices, while real GDP is measured at constant (base-year) prices, removing the effect of inflation. Real GDP reflects actual growth in output.

6. What is the GDP deflator and how is it calculated?

   The GDP deflator measures the overall price level of all goods/services in an economy. GDP Deflator = (Nominal GDP / Real GDP) × 100.

7. What is the current base year for India's GDP/National Income series (as of mid-2020s)?

   2011-12 is the base year for the current National Income series. (A revision to base year 2022-23 is under preparation.)

8. What are the three sectors of the economy and what activities does each include?

   Primary (agriculture, forestry, fishing, mining), Secondary (manufacturing, construction, industry), and Tertiary (services like trade, banking, IT, transport).

9. Which sector contributes the largest share to India's GDP/GVA?

   The Tertiary (services) sector, contributing roughly 50-55% of GVA, followed by industry (~25-30%) and agriculture (~15-18%).

10. What is the difference between GDP and GVA (Gross Value Added)?

    GVA = GDP − Net Indirect Taxes (i.e., GDP at market price = GVA at basic price + Product Taxes − Product Subsidies). GVA measures output from the producers'/supply side.

11. Although agriculture's share in GDP is declining, why is it still significant in India?

    It still employs the largest share of the workforce (around 45%), ensuring livelihoods, food security, and supplying raw materials to industry, despite contributing only ~15-18% of GVA.

12. What is the difference between the organised and unorganised sectors?

    The organised (formal) sector has registered enterprises with regular employment, social security, and regulation. The unorganised (informal) sector is unregistered, with irregular jobs and no social security; it employs the bulk of India's workforce.

13. When did economic planning begin in India and what was the model adopted?

    Economic planning began with the First Five Year Plan in 1951. India adopted the model of a mixed economy with centralized Five Year Plans, inspired by the Soviet model and the Mahalanobis model (Second Plan).

14. When was the Planning Commission established and when was it replaced?

    The Planning Commission was set up in 1950 (by a Cabinet resolution) and was replaced by NITI Aayog on 1 January 2015.

15. What does NITI Aayog stand for and what is its primary role?

    National Institution for Transforming India. It is a policy think-tank (advisory body) that promotes cooperative and competitive federalism, fosters states' involvement, and does not allocate funds (unlike the Planning Commission).

16. Who is the Chairperson of NITI Aayog and who heads its day-to-day work?

    The Prime Minister is the ex-officio Chairperson. Day-to-day work is led by a Vice-Chairperson and a CEO, along with full-time and ex-officio members and a Governing Council of all Chief Ministers and Lt. Governors.

17. What is the Mahalanobis model associated with which Five Year Plan?

    The Mahalanobis model, emphasizing heavy/capital-goods industries, was the basis of the Second Five Year Plan (1956-61).

18. What is inflation?

    Inflation is a sustained rise in the general price level of goods and services over a period of time, leading to a fall in the purchasing power of money.

19. What is the difference between demand-pull and cost-push inflation?

    Demand-pull inflation occurs when aggregate demand exceeds aggregate supply ('too much money chasing too few goods'). Cost-push inflation occurs when production costs (wages, raw materials) rise, pushing up prices.

20. What are the two main price indices used to measure inflation in India?

    Wholesale Price Index (WPI), compiled by the Office of the Economic Adviser (DPIIT), and Consumer Price Index (CPI), compiled by the NSO/MoSPI. The RBI uses CPI (Combined) for inflation targeting.

21. Define deflation, disinflation, and stagflation.

    Deflation: a sustained fall in the general price level. Disinflation: a reduction in the rate of inflation (prices still rise but slower). Stagflation: high inflation combined with stagnant growth and high unemployment.

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