Preparing for GS Paper III – Economy

Many people have been asking me about how to prepare for Economics. So, here it goes.

For the GS Paper III, you don’t need to be an economist to answer the questions that are being asked. You need to be a generalist.

The ONLY book I’ve read for Economy part in GS Paper III is the Macroeconomics – NCERT. It helped me in getting the basics right. After that I DID NOT refer to any other book at all. I feel that Economy is all about understanding the meanings of various terms correctly. Once you understand what a term really means, the logic that goes around that term isn’t very difficult to understand. So for this purpose I’ve maintained a table of 2 columns, in my notes, consisting of various terms in one column and their definitions + relevant contemporary examples in the other column.

To get the list of different terms I did 2 things, but before I mention that I based my preparation on one basic assumption. That is, UPSC will not ask for an Economics concept which has not been in news/Union Budget/Economic Survey. I believed that it is rational for me to think that there is no reason why UPSC would ask a question on a topic which doesn’t fit into this criteria. Being an ardent follower of newspapers, I believed that I wouldn’t miss any important topic or issue that comes up in the newspapers. So with this as my base, I did the following 2 things:

  1. Whenever I see any new Economics related term in newspapers that I don’t know, I would first go and study the definition and try to understand the concept in the context of the newspaper article. This made it easy for me to remember the concept. For example, I read about “Sovereign Debt Crisis” in the context of Greek crisis. It serves me 2 purposes – understanding the concept well and also remembering that concept well because I have the context of some contemporary issue around that concept.
  2. Went through Economic Survey and Union Budget, not to get a hold of the numbers scattered in there, but to identify different terms (like ‘tax expenditure’) and then know their meanings (by looking it up in the internet). This year’s economic survey is quite good – especially the First Volume. Several concepts were well explained there and I strongly recommend the aspirants to go through it, from the mains point of view.

Apart from this, I’ve also read the Fourteenth Finance Commission Report and I’ve written an analysis on it earlier, which can be found here. In summary, the sources that I had followed:

  • Macroeconomics – NCERT
  • Newspapers
  • Economic Survey and Budget for identification of different terms