Last 10 days economy Revision Strategy for Prelims 2020

  • September 23, 2020
  • Posted by: OptimizeIAS Team
  • Category: Prelims
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The Last 10 Days Economy  revision strategy for Prelims 2020

Economy section is feared by many aspirants especially those belonging to the science background. I am decoding the mantra of what you can expect in UPSC CSE Prelims 2020 paper from the aspect of Indian Economy.

Do not miss this list of significant topics. Kindly understand why you are reading these topics by going through the relevance mentioned alongside.

In RBI, you need to focus on all of the following topics. But before that ask yourself why are you reading about RBI. Not just because it is the central bank of India but also that RBI is doing everything in its capacity to steer away the financial crisis India is facing right now. RBI went for first of its kind of “Operation Twist”. RBI’s measures like OMO, LTRO, WMA etc are very important. The biggest dilemma before RBI is how to manage inflation and growth dilemma. Things are pretty much serious in our economy as of now.

  1. History
  2. RBI 1934 act
  3. RBI Nationalization
  4. RBI Functions
  5. Inflation targeting
  6. MPC
  7. Monetary policy : Open market operation, Bank rate, Repo rate, Reverse Repo Rate LAF, SLR,MCLR
  8. Money supply ( M0, M1 , M2, M3 and M4) and demand slowdown
  9. Currency in circulation
  10. OMO and Operation Twist
  11. OMO and bond yield
  12. Yield inversion
  13. Monetary transmission
  14. Ways and Mean Advances
  15. Forex Reserves
    • Composition: Focus on where RBI puts this reserve
    • Value and Why it is increasing
    • Rank in world
    • Interest earned on forex reserve
    • Dividend and Surplus
    • Liberalized Remittances scheme
    • RBI Contingency Fund
    • Jalan Committee
    • Economic Capital Framework

India’s forex reserve has crossed $540mn! Huge, right? Hence it makes the concept of Forex Reserves highly important for the Prelims 2020.

Coming to the Banking part, we are going through a huge crisis in the banking sector currently. We also went for bank consolidation. This year we have completed 50 years of Bank Nationalization. Further, bank capitalization as per BASEL norms is also very relevant.

  • Bank consolidation
  • RBI regulatory role –Banking license etc
  • Cooperative banks and Urban Cooperative bank license
  • Run on Bank
  • Priority Sector Lending
  • NBFC vs Bank
  • NBFC crisis ( Shadow Banking) Asset Liability Mismatch
  • NPA and IBC project Sashakt, PCA, and S4A
    • BBB
    • FSDC
    • NSC
    • SFIO
    • RRBs
    • IFSC
  • BASEL norms, BASEL COMMIITTEE, Capital Adequacy Ratio, bank capitalisation
  • Bank Nationalization : 50 years, Private banks vs PSU banks
  • Payment Infrastructure Development fund
  • Loan moratorium
  • Insolvency code
  • DICGC limit increased. In the back drop of bank’s collapsing this topic has great importance.

GDP is declining. We are seeing a swift slowdown in terms of it. Question based on GDP has been asked a lot in recent years.  You need to understand different terms like slowdown, recession and depression and difference between them. This year stagflation is very important. Emphasize on the below mentioned topics;

  1. GDP calculation controversy
  2. Economic growth formula
  3. GDP VS GVA( GNP,NNP,PPI,NI) –trends are important for past one decade
  4. Real vs Nominal GDP
  5. CSO role
  6. NSSO role
  7. Inflation : Headline and Core, wholesale, retail and which dept. brings out, inflation vs Growth
  8. Base effect
  9. Stagflation
  10. Deflation
  11. IIP
  12. Core sector
  13. Economic growth
  14. Slowdown vs Recession vs Depression
  15. Recovery : V VS U VS W Shape
  16. FDI policy
  17. Savings and Investment rates trend
  18. Crowding in and crowding out of investments
  19. Foreign bonds
  20. Slowndown : Cyclical or structural

Unemployment and Poverty– India is looking at a massive unemployment in the past 46 years. Unemployment & Poverty in itself is a very crucial topic in UPSC CSE Economics section.

  1. Types of unemployment: Frictional, structural , disguised
  2. Trends in unemployment
  3. Informalisation and unorganized work
  4. Labour laws and welfare scheme for unorganized workers
  5. Inter State Migrant workers Act
  6. Gig economy
  7. Care economy
  8. Share economy
  9. ASEEM PORTALA
  10. Unorganized social security Act 2008
  11. PMSYM
  12. Global Commission on the Future of Work-ILO
  13. ILO -144
  14. Trade unions
  15. Poverty trend
  16. New schemes on poverty

In the Fiscal Policy part, the government has brought a lot of changes in it. Especially the Escape Clause in the FRBM Act. Issues like increasing fiscal deficit and fiscal stimulus is very important. GST Compensation has become a bone of contention between states and centre.

  1. Interim budget vs. Normal budget
  2. Interim budget vs. Vote on account
  3. Progressive Fiscal policy, capital expenditure, Defence expenditure, capital formation, ICOR
  4. Fiscal Deficit and FRBM Act, FRBM Escape Clause Borrowing of state and center, 15th Finance Commission, Non-tax receipts, Capital receipts, Revenue receipts, Revenue expenditure
  5. Fiscal consolidation vs Fiscal stimulus, Revenue foregone
    • Debt: causes, significance, danger
    • Borrowings: Impact, Crowding Out, External Commercial borrowing
    • Small saving instrument
    • Inverted duty structure
    • Anti-dumping duty
    • Countervailing duty
    • Angel Tax
    • GST: GST Council, Anti-profiteering authority (Type of body, composition, functions), white good, brown goods, Input tax credit, E- way Bill, GST Compensation Fund, GST compensation cess
    • Cess vs Surcharges
    • FSDC
    • Taxes: Direct vs Indirect, Trends in Direct and Indirect Tax, Corporate Tax cut , Composition of Direct Tax, Tax buoyancy vs Tax elasticity, Tax base, Revenue foregone
    • Predatory pricing
    • Commercial papers (CPs), debentures and certificates of deposit
  1. (CDs)
  2. 20 Off budget items
  3. 21 Disinvestment, strategic disinvestment, ways of disinvesting
  4. Inverted Duty structure
  5. Controller general of Account
  6. Equalization levy / google tax, BEPS

Infrastructure & External Sector are other pivotal topics to be studied. Go through all the subtopics in depth.

  1. National Infrastructure Pipeline
  2. KUSUM
  3. Sagarmala
  4. Agriculture infrastructure Fund
  5. Bharat Net
  6. Digital divide
  7. Steel Production
  8. Strategic Petroleum reserves
  9. Dedicated Freight Corridors
  10. Infrastructure Investment trusts, Real estate investment trusts
  11. Coal mining and coal mines, facts

External sector

  1. BOP basics : current account and capital account composition and trends( FDI,FII, P-notes), External Commercial Borrowing
  2. India’s trade deficit
  3. Free trade Agreements and free trade zones
  4. Currency devaluation and appreciation ( Rupee devaluation) causes and remedy, its impact on inflation and other macro economy indicators
  5. Generalized system of preference
  6. WTO- Developed vs Developing countries, SDR
  7. IMF SDR
  8. Role of RBI
  9. APEDA
  10. Generalized preferential treatment
  11. MFN and National Treatment
  12. Import substitution
  13. Atmanirbhar Bharat
  14. DGTR : Anti-dumping duty vs countervailing duty
  15. Capital Account convertibility
  16. Exchange rate
  17. Negative list of imports

Black Money – expect at least one question from this section. India’s black money problem has been largely misdiagnosed. The current legislative measures have fallen short in rectifying such a huge problem. Focus on the following topics in this section.

  1. Meaning
  2. Shell companies
  3. FATF and Grey and Black list
  4. PLMA
  5. Enforcement Directorate
  6. Round tripping of FDI , FPI
  7. Tax Haven 

Agriculture– It is the backbone of the Indian Economy. With the huge criticism the latest Agri Bill has received by farmers from different parts of India brings the Agriculture sector back to the limelight.

  1. International year of Millet
  2. Millet in India
  3. Green Agr
  4. Global Environment Facility( 5 Conventions )
  5. Operation green : potato, tomato ,onions
  6. Agri Market Infra Fund –NABARD
  7. PM Kisan Man Dhan scheme
  8. Kisan Credit Card: 20 years
  9. Aspirational Districts
  10. Pradhan Mantri Anna data Aay Sanrakshan Abhiyan (PM-AASHA)
  11. Price deficient payment
  12. Mega Food Park scheme
  13. PradhanMantriKisan SAMPADA Yojana

Industries –We are seeing shrinking of 8 core industry sector in India. It has shrunk by almost 15% till June 2020. These 8 industries namely, coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity account for 40.27% in the Index of Industrial Production (IIP).Disinvestment is an important topic , expect one questions related to strategic disinvestment. Further MSME sector is in deep crisis.

  1. MSME Act and schemes
  2. Emergency Credit Line Guarantee Scheme (ECLGS) and National Credit
  3. Udyam Portal
  4. Champion portal
  5. Guarantee Trustee Company
  6. Prime Minister’s Employment Generation Programme
  7. DIPP
  8. GeM and NMG
  9. National E-mobility Programme FAME
  10. Maharatna ,Navratna status criteria and significance
  11. DIPAM
  12. LLP
  13. Country of origin
  14. One district one product.

Funds–  This is another important topic to be covered. Mobilization of resources is significant chapter for Prelims 2020. Plus the controversy surrounding the PM CARES fund make it all more critical to read about funds in depth.

  1. Nirbhaya Fund
  2. NDRF
  3. PMCARES
  4. PMRF
  5. Migrant population and National Migrant Information System
  6. Rural Infrastructure Development Fund
  7. Crowd funding
  8. Agriculture infrastructure Fund
  9. Alternate Investment Fund
  10. Gareeb Kalyaan Rojgaar yojna

Here are some miscellaneous topics which you cannot afford to ignore.

  1. Competition Act
  2. CCI and Anti –trust
  3. Essential Commodities Act
  4. AGR issue
  5. Compulsory licensing
  6. Gold Bond Scheme
  7. FSSAI
  8. Production linked Incentive Scheme
  9. Force Majure
  10. Act of God
  11. Overseas bond

Indices and Reports – Every year at least one question is definitely asked from this section. Keep revising these indices & reports till October 4!

  1. WTO: Types of subsidies, developed vs developing , GPS
  2. World Population Prospects : India population , fertility rate
  3. ILO
  4. WIPO
  5. WCO
  6. Global Financial Development Report – World Bank.
  7. Global Manufacturing Index (GMI) – World Economic Forum.
  8. World Employment and Social Outlook 2018 – International∙ Labour Organization (ILO).
  9. World Economic Outlook – International Monetary Fund (IMF).
  10. World Investment Report – United Nations Conference on Trade∙ and Development (UNCTAD). World Economic Freedom Index – Centre for Civil Society in∙ collaboration with Canada’s Fraser Institute.
  11. International Intellectual Property Index – U.S. Chamber of∙ Commerce’s Global Intellectual Property Center (GIPC)
  12. India Innovation Index – Jointly developed by NITI Aayog, DIPP (The name of the Department of Industrial Policy and Promotion (DIPP) has been changed as Department for Promotion of Industry and Internal Trade (DPIIT)) and CII in consultation with World Economic Forum (WEF), World Intellectual Property Organization (WIPO), Corne University, UNIDO, ILO, OECD, UNESCO, ITU etc.
  13. Network Readiness Index – World Economic Forum (WEF)

Budget Related topics are favourite of the examiner. There is no scope for a serious aspirant to miss out on these special details relating to the Indian economy.

  1. Smart Meter
  2. Ease of living
  3. Budget theme
  4. NABARD
  5. Seaweed
  6. Cropping pattern
  7. Integrated farming system
  8. ZBNF
  9. PM KUSUM
  10. TECH Textile
  11. National Gas Grid
  12. TReds
  13. Nirvik

I have tried my best in enumerating all the important topics from each section of the Economics subject which can be asked in UPSC CSE Prelims 2020. Go through each and every subtopic and cover them in depth. Keep practicing the Optima Mock Tests and better up your chances of clearing your Prelims 2020 with ease.

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Good Luck To You All!!