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 & Scitovsky, Arrow’s Impossibility Theorem, A.K. Sen’s Social Welfare Function.
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.
Money – Banking and Finance:
(a) Demand for and Supply of Money: Money Multiplier Quantity Theory of Money (Fisher, Pique and Friedman) and Keynes’s 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 Govt. revenue, forms of Taxes and Subsidies, there incidence and effects. Limits to taxation, loans, crowding-out effects and limits to borrowings. Public Expenditure and its effects.
(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 under development 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 there 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.
Growth and Development:
(a) Theories of growth:
(i) Harrod’s model,
(ii) Lewis model of development with surplus labour
(iii) Balanced and Unbalanced growth,
(iv) Human Capital 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.
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.
Indian Economy after Independence:
A 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 there-in.
(v) Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.
B 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.
INDIAN ECONOMIC SERVICES
IES / ISS Exam Detailed Syllabus
The difficulty level of the papers in General English and General Studies will be such as may be expected of a graduate of an Indian University.
The standard of papers in the other subjects will be that of the Master’s degree examination of an Indian University in the relevant disciplines. The candidates will be expected to illustrate theory by facts, and to analyse problems with the help of theory. They will be expected to be particularly conversant with Indian problems in the field of Economics /Statistics.
General English: Candidates will be required to write an essay in English. Other questions will be designed to test their understanding of English and workmanlike use of words. Passages will usually be set for summary or précis.
General Studies: General Knowledge including knowledge of current events and of such matters of everyday observation and experience in their scientific aspects as may be expected of an educated person who has not made a special study of any scientific subject. The paper will also include questions on Indian Polity including the political system and the Constitution of India, History of India and Geography of a nature which the candidate should be able to answer without special study.
General Economics I:
- 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.
- 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.
- 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.
- Theory of Distribution: Neoclassical 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. Macro- distribution theories of Ricardo, Marx, Kaldor, Kalecki.
- Welfare Economics: Interpersonal comparison and aggregation 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.
- 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.
- 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 nonlinear functions. Least square methods and other multivariate analysis (only concepts and interpretation of results). Analysis of Variance, Factor analysis, Principal component analysis, Discriminant analysis. Income distribution: Pareto law of Distribution, lognormal distribution, measurement of income inequality. Lorenz curve and Gini coefficient. Univariate and multivariate regression analysis. Problems and remedies of Heteroscedasticity, Autocorrelation and Multicollinearity.
General Economics II:
- Economic Thought: Mercantilism Physiocrats, Classical, Marxist, Neoclassical, Keynesian and Monetarist schools of thought.
- 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.
- 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.
- 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.
- 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 school) 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.
- International Economics: Gains from International Trade, Terms of Trade, policy, international trade and economic development- Theories of International Trade; Ricardo, Haberler, Heckscher- Ohlin and Stolper- Samuelson- Theory of Tariffs- Regional Trade Arrangements. ASEAN Crisis of 1998, Global Financial Crisis of 2008 and Euro Zone Crisis- Causes and Impact.
- 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.
- Global Institutions: UN agencies dealing with economic aspects, World Bank, IMF and WTO, Multinational Corporations. G-20.
General Economics III:
- 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 price of investment, unskilled labour and foreign exchange. Budgetary deficits. Theory of public debt management.
- Environmental Economics: Sustainable development, Rio process 1992 to 2012, Green GDP, UN Methodology of Integrated Environmental and Economic Accounting. Environmental Values: User 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. Climate change problems. Kyoto protocol, UNFCC, Bali Action Plan, post 2015 agreements, tradable permits and carbon taxes. Carbon Markets and Market Mechanisms. Climate Change Finance and Green Climate Fund.
- 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.
- State, Market and Planning: Planning in a developing economy. Planning regulation and market. Indicative Planning. Decentralized Planning.
- 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 stabilization and structural adjustment packages: fiscal reforms, financial sector reforms and trade reforms.
- 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.
- 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
- 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.
- Agriculture and Rural Development Strategies: Technologies and institutions, land relations and land reforms, rural credit, modern farm inputs and marketing- price policy and subsidies; commercialization and diversification. Rural development programmes including poverty alleviation programmes, development of economic and social infrastructure and New Rural Employment Guarantee Scheme.
- 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.
- Industry: Strategy of Industrial development: Industrial Policy Reforms; 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, privatization and disinvestments.
- Labour: Employment, unemployment and under- employment, industrial relations and labour welfare- strategies for employment generation- Urban labour market and informal sec¬tor employment, Report of National Commission on Labour, Social issues relating to labour e.g. Child Labour, Bonded Labour, International Labour Standard and its impact.
- Foreign Trade: Salient features of India’s foreign trade, composition, direction and organization of trade, recent changes in trade policy, balance of payments, tariff policy, exchange rate, India and WTO requirements. Bilateral Trade Agreements and their implications.
- Money and Banking: Financial sector reforms, Organisation of India’s money market, changing roles of 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.
- Inflation: Definition, trends, estimates, consequences and remedies (control): Wholesale Price Index, Consumer Price Index: components and trends.