UPSC CSE Economics Optional Syllabus 2026

Economics as an optional subject in UPSC Civil Services Exam(CSE) is popular among aspirants preparing for CSE. Economics is often regarded as a high scoring optional subject in UPSC CSE. Many toppers such as Tejasvi Rana (325/500) in 2016 have scored highest marks by choosing Economics as an optional subject.

The subject has many overlapping sections, hence also helps the students in general studies for both prelims and mains stage of the examination process. Economics optional paper has a weightage of 500 marks for both Paper-I and Paper-II. Opting Economics as an optional subject can actually make a difference in the All India Rank (AIR) of the candidate in the UPSC final result list.

UPSC CSE Economics Optional Syllabus Paper-I

S.No.	Paper-I Economics	Syllabus
1.	Advanced Micro Economics	(a) Marshallian and Walrasian Approaches to Price determination (b) Alternative Distribution Theories : Ricardo, Kaldor, Kalecki (c) Markets Structure : Monopolistic Competition, Duopoly, Oligopoly (d) Modern Welfare Criteria : Pareto Hicks and Scitovsky, Arrow’s Impossibility Theorem, A. K. Sen’s Social Welfare Function.
2.	Advanced Macro Economics	Approaches to Employment Income and Interest Rate determination : Classical, Keynes (IS-LM) curve, Neo-classical synthesis and New classical, Theories of Interest Rate determination and Interest Rate Structure
3.	Money-Banking and Finance	(a) Demand for and Supply of Money : Money Multiplier Quantity Theory of Money (Fisher, Pigou and Friedman) and Keynes’ Theory on Demand for Money, 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. (b) Public Finance and its Role in market economy : in stabilization of supply, allocation of resources and in distribution and development. Sources of Government revenue, forms of Taxes and Subsidies, their incidence and effects. Limits to taxation, loans, crowding-out effects and limits to borrowings. Public expenditure and its effects.
4.	International Economics	(a) Old and New theories of International Trade (i) Comparative advantage (ii) Terms of Trade and offer curve (iii) Product cycle and Strategic trade theories. (iv) Trade as an engine of growth and theories of underdevelopment in an open economy. (b) Forms of protection : Tariff and quota. (c) Balance of Payments Adjustments : Alternative Approaches. (i) Price versus income, income adjustments under fixed exchange rates. (ii) Theories of Policy mix. (iii) Exchange rate adjustments under capital mobility. (iv) Floating Rates and their implications for developing Countries: Currency Boards. (v) Trade Policy and Developing Countries. (vi) BOP adjustments and Policy Coordination in open economy macro-model. (vii) Speculative attacks. (viii) Trade Blocks and Monetary Unions. (ix) WTO : Trims, TRIPS, Domestic Measures, Different Rounds of WTO talks.
5.	Growth and Development	(a) (i) Theories of growth : Harrod’s model (ii) Lewis model of development with surplus labour (iii) Balanced Unbalanced Growth (iv) Human capitals and Economic Growth. (v) Research and Development and Economic Growth. (b) Process of Economic Development of less developed countries: Myrdal and Kuznets on economic development and structural change: Role of Agriculture in Economic Development of less developed countries. (c) Economic Development and International Trade and Investment, Role of Multinationals. (d) Planning and economic Development: changing role of Markets and Planning, Private-Public Partnership. (e) Welfare indicators and measures of growth- Human development indices. The basic needs approach. (f) Development and Environmental Sustainability- Renewable and Non Renewable Resources, Environmental Degradation, Intergenerational equity development.

UPSC CSE Economics Optional Syllabus Paper-II

S.No.	Paper-II Economics	Syllabus
1.	Indian Economy in Pre-Independence Era	Land System and its changes, Commercialization of agriculture Drain theory, Laissez faire theory and critique. Manufacture and Transport: Jute, Cotton, Railways, Money and Credit.
2.	Indian Economy after Independence : The Pre-Liberalization Era	(i) Contribution of Vakil, Gadgil and V.K.R.V. Rao (ii) Agriculture: Land Reforms and land tenure system, Green Revolution and capital formation in agriculture. (iii) Industry: Trends in composition and growth, Role of public and private sector, small scale and cottage industries. (iv) National and Per capita income: patterns, trends, aggregate and Sectoral composition and changes therein. (v) Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.
3.	The Post Liberalization Era	(i) New Economic Reform and Agriculture: Agriculture and WTO, Food processing, subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth. (ii) New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals. (iii) New Economic Policy and Trade: Intellectual property rights: Implications of TRIPS, TRIMS, GATS and new EXIM policy. (iv) New Exchange Rate Regime: Partial and full convertibility, Capital account convertibility. (v) New Economic Policy and Public Finance: Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation. (vi) New Economic Policy and Monetary system. Role of RBI under the new regime. (vii) Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments. (viii) New Economic Policy and Employment: Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural Employment Guarantee Scheme.

Download Economics Optional Previous Year Papers for CSE Mains

Open the NEXT IAS website.
Go to the ‘Free resources’ tab and click on the ‘Previous Year Papers’ in the menu.
You will be redirected to the page where you can find all the previous year exam papers of the UPSC CSE.
You can also navigate using the dropdown box of the side. For example, navigating to prelims, mains or optional papers.
Search through the list of available papers to locate the Economics Optional Paper.
You can both view and download the papers.
Download the Economics optional subject pdf by clicking the download icon or using the ‘Save As’ option from the browser.
Once finished up with the download, save the document in a folder for future reference.

Download UPSC Previous Year Papers

Economics Optional Past Year Toppers

In recent cycles, Economics has not been the most common choice among AIR 1 candidates, yet it continues to feature regularly among high-rankers, especially those with strong economics or quantitative backgrounds.
To provide one example, Gaurav Agrawal (AIR 1, 2013) remains the most frequently cited Economics-optional topper, with a reported 296/500 in the optional. Other high-rankers like Vidushi Singh (AIR 13, 2022) and several others in the top-50 have demonstrated that disciplined command over theory, numerical practice, and linkage with current macroeconomic issues can make Economics a powerful scoring subject.
Overall, for the past five years, the Economics optional has had a fair level of success and has attracted candidates who are familiar with graphs, models, and analysis of policies and seek synergy between GS III and the interviews.

FAQs on Economics Optional Syllabus

What does the syllabus for the Economics optional contain?

There are two papers, each of 250 Marks (Paper I and Paper II) in UPSC Economics optional, and these papers have a descriptive format, emphasizing Economic Theory and the Economy of India.

What are the main components of Paper I?

Paper I broadly covers advanced microeconomics, macroeconomics, money–banking and finance, international economics, and growth and development theory.

What does Paper II of Economics optional include?

Paper II is concerned mainly with the Indian economy: planning and development, agriculture and industry, public finance, external sector, poverty, inequality, employment, and economic reforms after 1991.

What background is ideal for choosing Economics optional?

A graduation background in economics, commerce, or related fields helps, but non-economics students can manage with strong interest in theory, comfort with basic mathematics, and consistent practice.

How should I use the Economics optional syllabus for preparation?

Break the syllabus into micro-topics, map each to specific textbooks and previous-year questions, and revise with numerical/problem practice, diagrams, and current economic data and reports.