B.A. (Pass) - Economics Concepts and Methods

B.A.
(Pass)______________________________________________________________________________
Economics Concepts and methods

1. P.A.Samuelson & W.Nardhans: Economics (Latest Edition)
2. Laxmi Narayan Nathuramka: Arthic Avedharnaya avam Vidhiya
3. Mehta and Madanani: Elementry Mathematics for Use of Economics
4. M.L.Chhipa and Shankarlal: Arthic Avedharnaya avam Vidhiya
Economy of Rajasthan
1. Ashok Bapna (ed): Industrial Potential of Rajasthan

2. LAXMI NARAYAN NATHURAMKA: RAJASTHAN KI ARTHAVYAVASTHA
3. MOHAN SINGHAL:RAJASTHAN KI ARTHAVYAVASTHA
References:
1. Directorate of Economics and Statistics, Government of Rajasthan, State Income of Rajasthan
2. Government of Rajasthan, Five year Plan Documents
3. Government of Rajasthan, Budget Studies
4. Government of Rajasthan, Statistical Abstract of Rajasthan
5. Government of Rajasthan, Reports of Desert Development Commisioner
6. Directorate of Agriculture, Government of Rajasthan, Agriculture in Rajasthan
7. Directorate of public Relations, Government of Rajasthan, Land Reforms in Rajasthan
Micro Economic Theory
Books Recommended :
1. D. Salvator : Micro Economics, harper-Collins, 1991
2. H.L. Ahuja : Advanced Economic Theory, S. Chand and Company, New Delhi.
3. H.L. Ahuja : Uchchatar Arthik Siddhant, S. Chand & Co., New delhi
4. Laxminarayan Nathuramka : Vyasti Arthshastra, College Book House, Jaipur.
Reference Books :
1. R.H. Leftwitch : price System and Resource Allocation (Hindi & English)
2. Samuelson and Nordhans : Economics
3. J.P. Gould and C.E. Ferguson : Micro Economic theory Revised by J.P. Gould and e.P. Lazer, All India
Traveller Book Seller. Delhi.
Indian Economy
Books Recommended :
1. R.H. Leftwitch : Price System and Resource Allocation (Hindi & English)
2. Samuelson and Nordhans : Economics
3. Agarwal A.N. : Indian Economy
4. Nathuramka Laxminarayan : Bhartiya Arthvyavastha.
5. Govt. of India : Economic Survey (Hindi & English)
6. Gott. of India : Five Year Plant (Latest)
7. Misra S.K. and V.K. Puri : Indian Economy.
8. Rudra Dutta & Sundaram : Indian Economy (Hindi & English)
9. R.B.I. : Report on Currency and Finance (Latest)
Application of Mathematics in Economics

Book Recommended :
1. J.M. Henderson and R.E. Quandt, Micro Economic Theory : A Mathematical Approach, McGraw Hill,
London, Third Edition (Relevant Chapters for Section A & B).
2. B.C. Mehta and G.M.K. Madnani, Mathematics of Economists, Sultan chand and Sons, New Delhi,
(Relevant Chapters for Section-C)
3. L.N. Nathuramka-Arthashastra Men Ganit Ke Prayog, College Book House, Jaipur
Feference Books :
1. B.C. Metha, mathematical Economics : Micro Economic Models, Sultan Chand & Sons, New Delhi
(Relevant Chapters for Section A & B)
2. Alpha, C. Chiang, Fundamental Methods of Mathematical Economics, McGraw Hill, Tokyo
Macro Economic Theory
Book Recommended :
1. G. Ackley, Macroeconomic Theory, 1988.
2. Dembourh, Macroeconomic Theory, 1988.
3. Rana and Verma, Macroeconomic Analysis, Vishal Publishing House.
QUANTITATIVE METHODS FOR ECONOMICS
Book Recommended :
1. B.C. Mehta and G.M.K. Madnani, Elementray mathematics for use in Economics, Laxmi Narain
Agrawal, Agra.
2. S.P. Gupta, Statistical methods, Sultan Chand and Sons, New Delhi.
Book Reference :
1. Hall and Knight, Higher Algebra.
2. A.L. Nagar and R.K. Das. Basic Statistics, Oxford University Press, Bombay.
INDIAN ECONOMIC THINKERS
Book Reference :
1. Ganuguli B.N. (1977), Indian Economic Thought : A 19th century Perspective, Tata McGraw Hill, New
Delhi.
2. Gupta, J.N. Ed. (1971), R.C. Dutta - Life and Works London. Kautilya (1951), Arthashstra, Translated
by R. Sharma Shastry, Mysore, Kulkarni S. A., (1987), Translated by M. Tapasvi, Ekatm Artniti,
Suruchi Prakashan Delhi.
3. Kautilya (1951), Arthasthasra Transleted By. R. Sharma Shastry Mysore.
4. Kulkarni S.A., (1987),Translated By M. Tapasvi Ekatar Arthniti, Suruchi Prakashan, Delhi
B.A.(Hons)______________________________________________________________________
Paper 1 : Micro Economic Theory
1. Books recommended :
1. J.P Gould and C.E Ferguson, Micro Economic Theory, All India Traveller Book Seller, New
Delhi.
2. H.L Ahuja, Advenced Economic Theory, S. Chand and Company, New Delhi.
3. H.L Ahuja, Uchhttar Arthik Sidhant, S. Chand and Company, New Delhi.
Books for Reference :
4. Richard A Bilas :Vyashti Arthastra. McGraw Hill Books Company, Tokyo.

5. Richard A.Bilas, Micro Economic Theory. Sahaum's outline series.
6. Salvotra, Micro Economic Theory. Sahaum's outline series
Paper-II : Mathematical Methods for Economics
1. Books Recommended :
1. B.c Mehta and G.M.K Mahani.Mathematics for Economics Sultan Chand and Sons. New
Delhi.
2. L.N Nathurarnka, Arthshastra me Ganit ke Prayog (Hindi). College Book House Jaipur
3. Alpha C. Ching, Fundamental Methods of Mathematical Econics. McGraw Hill, Tokyo.
4. Dewling, Mathematics for Economicsts, schaum's outline series McGrew Hill Book, Company,
Delhi.
Paper III : History of Economic Thought
Books Recommended :
1. Alexander Gray, Development of Economic Doctrine.

2. L.H Heney, History of Economic, Thought.
3. V.C Sinha, Arthik Vicharo ka Itihas
PaperIV : Economy of Rajasthan
Books Recommended :
1. L.N Nathuramka, Economy of Rajasthan, College Book House, Jaipur.

2. Laxmi Narain Nathuramka; Rajasthan ki Arthvyavastha (Hindi).
3. Ashoke Bapna, (e.d) Economics Development of Rajasthan.
Reference Books :
4. Directorate of Ecomomics and Statistics, Govt. Of Rajasthan,State Income of Rajasthan.

5. Govet. of Rajasthan, Five years Plan Documents
6. Govet. of Rajasthan, Budget Studies.
Paper V : Macro Economic Theory

Books Recommended :
1. E. Shapiro : Macro Economic Analysis(Latest Ed.)
2. C.S.O. : National Income Statistics (Latest Issue)
3. Welfared Beckman : An Intorduction to National Income Analysis, Chapters, 1, 2, 3, 4, 7 and8.
4. Tata Services Ltd. A Statistical Outline of India, 1994-95.
5. Rana and Verma : Macro Economic Analysis(LatestEd.)
Paper VI : Indian Economy
Boks Recommended :
1. A.N. Agarwal : India Economy, Latest Ed. Wiley Easter Ltd.,New Delhi.
2. A.N.Agarwal : Bhartiya Arthvyavastha, (Latest Ed.)
3. Laxmi Narayan Nathurama : Bhartiya Arthvyavastha,(Latest Ed.)
4. Rudra Dutta and K.P.M. Sunderama : Indian Economy, (Latest Ed.)
5. S.K. Mishra & V.K. Puri : Indian Economy.
6. Government of India : Economic Survey (Latest Ed.)
Paper VII : International Economics
Books Recommended :
1. Lindert : International Economics, 1986
2. P.T. Ellsworth and C.O. Lect : International Economy
3. Kundu & Ray : International Economics.
4. Bo Sodersten and Geoffrey Reed : international Economics.
5. D.Salvatore : International Economics, MacMillan, 1990.
6. K.D. Swami : Antarrashtriya Arthshastra, Scientific Publications, Jodhpur.
7. M.C. Vaish & Sudama Singh : Anterrashtriya Arthshastra
Paper VIII : Statistical Methods of Economics
Books Recommended :
1. S.P.Gupta : Satistical Method.
2. Kailash Nath Nagar : L. Sankhyiki ke Mool Tatva, Meenakshi Prakashan, Meerut
Reference Books :
1. A.L. Nagar and R.K. Das : Basic Statistics, Oxford University Press, Bombay.
2. F.F.Croxton, D.J. Cowden & S. Klwin : Applied General Statistics, Prentic Hall of India, New Delhi.
Paper IX : Public Finance
REcommended Books :
1. R.A. Musgrave : Theory of Public Financee
2. R.A. Musgrave and Musgrave : Public Finance in theory and practice.
3. S. Ganguli : Public Finance. (Latest Ed.)
4. H.L. Bhatia : Public Finance.
5. D.N. Dwivderi : (Ed.) Reading in Indian Public Finance (Relevant Chapters).
6. Prem Prakash Sharma : Sarvajanik Vitt Ke Siddhant.
Reference Book :
1. Government of India, Economic & Functional Classification of Centeral Government Budget.
Paper X : Development Economics
Book Recommended :
1. W.A. Lewis : Development Planning
2. E. Lebargen : Economic Development.
3. M.E. Jhingan : Economic of Development.
Paper XI : Money and Financial System
Book Recommended :
1. L.V. Chandler amd S.M. Goldfeld : The Economics of Money and Banking (Latest Ed.) Chs. 1-7, 18.
2. S.B. Gupta : Monetary Economics, chs. 1-10, 15-20.
3. Reports of the committees to Review the working of the Monetary system (April, 1985), chs. 4, 5-8, 10-
13.
4. Report of the committtee(Narasimahan) on the Finance system (Nov. 1991), chs. VIII.
5. N.S. Toor : Non-Performing Advances in Banks (Skylork, J.D.)
Paper XII : Mathematical Economics
Book Recommended
1. J.M. Henderson & R.L. Quandt, Microeconomic Theory : A Mathematical Approach, 3rd Ed. (relevant
chapters for sections A & B).
2. B.C. Metha & G.M.K. Madnani, Mathematics for economists (relevant chs. Latest edition).
Reference :
1. Alpha C. Chiang : FundamentalMethods of Mathematical Economics, 3rd Ed. (relevant chs. for section
"C")
2. Deward T. Dowling : Mathematics for economists Schaum's outline Series (relevant chs.)
3. B.C. Metha : Mathematical Economics : Micro Economic Models (reevant chs.)
M.A.___________________________________________________________________________
DISTRIBUTION OF PAPERS
M.A ECONOMICS
There shall be nine papers in all,seven will be compulsory papers and the rest two will be opotional papers.Each
paper except paper-VII (Comprehensive Economics) will contain nine questions having three questions in each
section.Candidates are rquired to attempt five questions in all selecting at least one question from each section.
Compulsory Papers
For M.A Previous
Paper-I : Micro Economics Theory
Paper-II : Macro Economics Theory
Paper-III : Quantitative Methods for Economics
For M.A Final
paper-IV : Public Finance
paper-V : International Economics
Paper-VI : Development Economics
Paper-VII : Comprehensive Economics
Optional Papers
Candidates will be required to select any two optionals-One for M.A (Previous)ant the other for M.A(Final)
examination from the following:
Optional(i) : Agricultural Economics
Optional(ii) : Co-operation:Theory & Practice
Optional(iii) : Industrial Economics
Optional(iv) : Public Enterprises & Public Unilities
Optional(v) : Labour and Industrial Relations
Optional(vi) : Demography
Optional(vii) : Advanced Indian Economy
Optional(viii) : Indian Banking System
Optional(ix) : International Finance
Optional(x) : History of Economic Thought
Optional(xi) : Mathematical Economics
Optional(xii) : Econometrics
Optional(xiii) : Survey Methods
COMPULSORY PAPERS FOR PREVIOUS

PAPER-I:MICRO ECONOMIC THEORY
Duration : 3 Hours Max.Marks : 100
Note: The paper will contain nine questions having three questions in each section.Candidates are required to
attempt five questions in all selecting at least one question from each section.
Section'A'
Theory of Consumer Behaviour-Cardinal and ordinal utility approaches.Derivation or Individual Demand

Curve,Market Demand Curve.Determinants of demand.Elasticities of demand.Prices,Income and Substitution
effects.Normal,Inferior and Giffen goods.Complementary and substitute goods.The Revealed preferce
hypothesis. Consumer Surplus and its reformulation. Consumer behaviours under uncertainty (elementary
approach).
Production:Production function-Law of variable proportions.Three stages of production.Laws of returns and
returns to scale.Isoquants and optimum factor combination.Expansion path and Isolines.Capital deepening and
Labour deeping technology through Isoquants.
Section'B'
Theory of cost-short run costs,long run costs.Empirical cost function (Stigler Survivor Method).Economics of
scale.
Different Market. Structure-Perfect competition and its relevance.
Monopoly-Impact of taxes on price and output.Measurement of Monopoly power.Discrimination of Monopoly
with illustrations.Impact of Monopoly on Economic Welfare.Monopolistic Competition-Product differentiation
and demand curve. Equilibrium of a firm (Chamberlin Model). Excedss capacity according to Chamberlin.
Oligopoly-Non-collusive oligopoly (cournot,Bertrand,chamberlin,Kinked demand curve and Stakelberg
Models) and Collusive Oligopoly (Cartels and price Leadership). Full cost pricing,principle of Hall and Hitch
Theory of limit pricing.
Section'C'
Pricing of factors and factors of production-Ractor pricing in competitive and imperfect competitive markets.
Exploitation of Labour (Joan Robinson and Chamberlin approaches) and Trade Union.Bilateral Monopoly.
Welfare Economics-Pareto optimality Criterion.Kaldor-Hicks Compensation Criterion.Bergson Social Welfare
Function.Maximization of social welfare and the point of Bliss.Welfare Maximization.Externalities.Theory of
Second Best.
Books Recommended:
1. A.Koutsoyiannis:Modern Micro Economics,MacMillan,London.
2. H.L. Ahuja:Advanced Economic Theory,S.Chand & Co.,New Delhi.
3. H.L. Ahuja,Uchchatar Arthik Siddhant (Hindi) S.Chand & Co.,New Delhi.
4. C.S.Barla , Uchchatar Vyashti Arthshastra, National Book House, Jaipur.
5. D.Salvatore:Micro Economic Theory,Schaum's Outline Series,Third edition,McGraw-Hill,Inc.New
Delhi.
Reference Books:
1. D.Salavatore:Micro Economic Theory Harper Collins.
2. J.M.Joshi:Theory of Value,Distribution and Welfare.
3. K.C.Roy Choudhary:Micro Economics,Tata McGraw-Hill Publishing Co.,New Delhi.
4. P.R.G. Layard and A.A.Walters:Micro Economic Theory,McGraw-Hill Book Co.,New Delhi.
5. Hal R. Varian:Micro economic Analysis (Indian print),Affiliated East-West Press Pvt. Ltd.,New
Delhi,Chapters 1-8,14-20, 23-26.
PAPER-II:MACRO ECONOMIC THEORY

Duration : 3 Hours Max.Marks : 100
Note:The paper will contain nine questions having three questions in each section.Candidates are required to
attempt five questions.all selecting at least one question from each section.
Section'A'
Basic Concepts & Methodology.Macro Economic variables(e.g., national

income,employment,saving,investment,price level,wages,interest rate).Real and nominal quantities.Stock and
flow variables and their inter-relationship.Problems of aggregation in the construction of Macro Economic
variables.
Structure of National Accounts-transactions of consumption,production,investment,government and foreign
trade sectors.Concepts,components and measurement of national income.Value of Money,changes in the value
of money.The Quantity Theory of Money and its variants including the Friedman's reformulation of the
Quantity Theory.Post-Keynesian Theories of Money Demand.
Section'B'
The Classical Theories of saving,investment,interest rate,wage and employment.The complete Classical model
of determination of employment and output.Say's Law,price and wage flexibility and full employment.The Real
Balance Effect.Keynesian criticism of the Classical theories.Keynesian model for the determination of
income,consumption,saving,investment,interest rate,wages and employment.The consumption function
hypotheses:Absolute Income,Relative Income permanent Income and.Life Cycle Hypothesis.Business Cycles-
models of Samuelson,Hicks and Kaldor.
Section'c'
Macro economic equilibrium-relative roles of monetary and fiscal policies.IS-LM analysis.Fleming-Mundell

open economy model.Stabilization policy:prospects and problems,Aggregate Demand and Aggregate supply
curve-analysis.
Phillips curve.The control of inflation and recession in developing and developed economies.
Present relationship amongst the Treasury,Central Bank and Commercial Banks,Instruments of monetary policy
and their relative effectiveness in various situations.
Money supply,its determinants,High powered money,Money Multiplier.Domestic monetary policy in India
since 1981-Its role effectiveness in various situations.
Note:Use of non-prigrannabke cakcydatir us oernutted.
Books Recommended
1. Gardner Ackley:Macro Economic Theory(Latest Ed.)
2. Martin Bailley:National Income and the Price Level,Chap.2and3
3. Edward Shapiro:Macro Economic Analysis(latest Ed.)
4. KC Rana and KN Verma:Macro Economic Analysis.
5. Weilliam H.Branson and James M.Litvack:Macro Economics.
6. Rosalind Lavacic:Macro Economics.
7. M.J.C.Surry (Ed.):Nacri-Economic Theories.
8. R.F. Henson:Guide to Keyw.
9. Dadle Dillard:A Guide to Keynes.
10. M.C.Vaish:Samashti Arthshastra (Hindi),Macro Economics (Eng.)
Reference Books:
1. M.K.Evans:Macro Economic Activity.
2. M.G.Muller (Ed.)Readings in Macro Economics,1966.
3. Reserve Bank of India:Report on Currency & Finance.
4. Reserve Bank of India:Annual Reports-1998 onwords.
5. Reserve Bank of India:Monthly Bulletin.
6. J.M.Keynes:The General Theory of Employment ,Interest and money.
7. Barret:Macro Economic Policy.
8. Uma Datta Roy Choudhary:National Income Accounting,Macmillan India Ltd.Delhi.
9. Prabhat Patnaik,Macroeconomics,Oxfor University Press.
10. A.K.Dasgupta,Macroeconomics Analysis.
11. H.L.Ahuja:Samashti Arthshastra (Hindi),Macro Economics(Eng.).
12. Rudi Dornbusch,SFisher and R Startz:Macroeconomics,Tata mcGra-Hill Edition,2000
13. Raghbendra Jha:Contemporary Macroeconomics.
PAPER-III QUANTITATIVE METHODS FOR ECONOMICS

Duration : 3 Hours Max.Marks:100
Note: The paper will contain nine questions having three question in each section.Candidates are required to
Section'A'
Measures of Central Tendency Mean,Median,Mode Geometric Mean and Harmonic Mean.

Dispersion-Quartile deviation,Standard deviation,coefficient of Variation.
Skewness-Kral Pearson's coefficient.(Emphasis on interpretion).
Correlation and simple regression.(Interpretation)
Analysis of Time Series-Components,Trend by moving average methodsand least squares
method.Determination of seasonal variation.
Index numbers-Cost of living indes,Fisher's Ideal Index and tests for Good Index Number.
Section'B'
Probability-Basic concepts and calculation of simple probability problems.Mathematical Expectation. Binomial,
Poisson and Normal Distributions. Sampling Distribution of x2 (chi Square) and F and their prooperties.
(withour proof). Testing of Hypothesis-Basic concepts, test (Significance of Mean and Difference between
means),c2 test, F-test, (test of Independence, homogeneity and Goodness of Fit).
Linear Programming-Formulation,Graphical solution,Simplex Method involving two variables for
maximization only.
Section'C'
Simple Differentiation, Partial Differentiation of Functions involving two independent variables. Maxima and
Minima with and without constraints.
Applications of differential calculus in Economics (Utility Maximization,profit maximization,calculation of
different elasticities,determination of nature of goods).Integration-One variable case,Definite
Integrals.Applications of Integral Calculus in Economics (Derivation of Total Cost function,consumption
function,saving function,consumer's surplus and producer's surplus).
First order difference equation and its applications in Economics (Cobweb Model and Income
Determination).Determinants,Matrices (Multiplication and Inverse).
Solution of Simultaneous Equations by Cramer's Rule.
Books Recommended
1. S.P.Gupta:Statistical Methods,Sultan Chand & Sons,New Delhi.
2. B.C.Mehta and G.M.K.Madnani:Mathematics for Economists,sultan chand & sons,New Delhi.
3. Kailash Nath Nagar:Sankhyiki Ke Mool Tatva (Hindi) Meenakshi prakashan,Meerut.
4. Laxmi Narain Nathuramka:Arthshastra Mein Ganit Ke Prayog (Hindi),college Book House,Jaipur.
Reference Books:
1. R.G.D.Allen:Mathematical Analysis for Economists,McMillan,London.
2. Alpha C.Chiang:Fundamental Methods of Mathematical Economics,McGraw-Hill,Tokyo.
3. F.F Croxton,D.S. Cowden & S.Klein:Applied General Statistics,prentice Hall of India,New Delhi.
4. A.L. Nagar and R.K. Das:Basic statistics,Oxford University press.
5. A.L. Nagar & P.D. Sharma:statistical Methods of Economic Analysis,S Chand & Co., New Delhi.
Edward T.Dowling:Mathematics for Economists,Schaum;sOutline series,McGraw-Hill Book Co., New
Delhi.
COMPULSORY PAPERS FOR FINAL
PAPER-IV:PUBLIC FINANCE
Duration : 3 hrs. Max. Marks : 100
Section'A'
Nature and Scope of public finance.Role of Government in the Economic activity-Allocation,Distribution and
Stabilization functions.Private public and Merit goods.Optimal Budgeting.Principle of Maximum Social
Advantage.Public Budgets.
Public Expenditure-A positive approach,Wagner's Law,Theory of Social Goods.Bowen,Lindhal and
Samuelson's Models.Effects of Public Expenditure on production and distribution.
Public Revenue-Buoyancy and elasticity of a tax.justice in taxation.Ability to pay Approach.Equi-
proportional,Equi-marginal and least aggregate sacrifice principles.
Section'B'
Shifting and Incidence of taxes under Monopoly and perfect Competition.Effects of Commodity taxation on
production.Effects of direct taxation on production(viz.labour supply and saving rate)and
distribution.Progressiveness of a tax system and its measurement.
Theory of public debt:Economic effects of public debt.Loans and saving as sources of finance for
development.Burden of public debt on present and future generations.
Fiscal Policy:Objectives,neutral,compensatory and functional finance.Balanced Budget Multiplier.Fiscal policy
in under-developed countries.Automatic and built-in-flexibility.
section'C'
Major trends in public expenditure in India(growth and composition).Salient features of the Indian Tax
System.Major Taxes,Main trends in the Revenue of the Central and State Government in Inida.Non-tax
revenue.Recent Tax Reforms.Internal and External public Debt of India.
Fiscal Federalism-Theory and problems,problems of centrestate financial relations in India.Criteria for resource
transfer from the centre to states.Finance Commissions and revolution of resources to Rajasthan.
Books Recommended
1. R.A.Musgrave:Theory of Public Finance.
2. R.A.Musgrave and P.B.Musgrave:Public Finance in Theory and practice.
3. S.Ganguli:public Finance.
4. H.L.Bhatia:public Finance.
5. Prem Prakash Sharma:Sarwajanik Vitt Ke Siddhant(Hindi).
6. R.Jha:Modern Theory of public Finance.
PAPER-V:INTERNATIONAL ECONOMICS
Duration:3 Hours Max.Marks:100
Section'A'
The Law of comparative Advantage-The Mercentalists.

Classical theory of comparative Advantage.View of Adam Smith,Mill,Haberler and Ricardo.
The standard theory of trade-production functions,community indifference curve,offer curves,Trade
Indifference Curve,Trade offer curves.Meade's General Equilibrium of trade.
Factor Endowments and Hecksher-ohlin Theory-Factor price Equalisation,Stolper-Samuelson
theorem,Rybezynski Theorems.
Empirical Tests of Ricardo and Heckscher-Ohlin Theories.Complementary Trade theories.
Economic Growth and International Trade,Growth of factors of production,Technical progress.
Section'B'
Free Trade versus protection.Tariff(partial Effects.Optimum Tariff).Other Trade Restrictions (Quota,Quota

versus tariff,Non-traiff barriers and the new protectionism).The political Economy of protectionism and
strategic trade policy.
Economic Integration-Theory of custom union,Regional Trading blocks.
Trade and Economic Development-Terms of Trade,Export Instability and economic development,Import
Substitution versus export promotion,current trade problems of developing countries,Role of the World
Bank/WTO.
International Resource Movements and Multinational Corporations-Labour and Capital Movements and their
effects,brain drain and role of MNC's.
Section'C'
Foreign Exchange Market:functions,Foreign Exchange risks,hedging,speculation,arbitrage,future and options.

Exchange Rate and Exchange rate theories.Spot and Forward rates,Purchasing power parity theory.Monetary
approach and portfolio Balance approaches of exchange rate determination.Euro-currency market.
Balance of payments-Accounting,causes of disequilibrium and remedies.Devaluation and Marshall Lerner
condition,Elasticity and absorption apoproaches.
Fixed and Flexible Exchange Rates-Case for and against fixed flexible exchange rates,adjustment under gold
standard,price flow mechanism.
Books Recommended:
1. Dominick Salvatore:International Economics,III EdI,MacMillan,1990
2. Herbert G.Grubel:International Economics,Richard D.Irwin,1977.
3. Bo Sodersten and Geofrey reed:International Economics,III edition,MacMillan,1994.
4. Peter B.Kenen:The International Economy,III ED.,Cambridge University press,2000.
Reference Books:
1. Peter M.Linderdett:International Economics,Latest Edition,Irwin.
2. D.Salvatore:Schaum's outline series on Theory and Problems of International Economics,3rd
ed.,McGraw-Hill 1990.
3. H.Robert Heller:International Trade,Theory & Empirical Evidence,prentice Hall of India(Latest Ed.)
4. Chacolidades:International Economics,II ed.,1990.
5. M.C. Vaish and Sudama Singh:Antarrashtriy Arthshashtra (Hindi), International Economics(Eng.).
PAPER-VI:DEVELOPMENT ECONOMICS
attempt five questions in all selecting at least one questions from each sections.
Section'A'
Meaning and measurements of economic development and human development.Structural features and process
of change-empirical studies of Kuznets,Denison & Chenery.Ingredients of development-Land,physical
capital,labour and human capital,technological change scale,organization.Growth models-Ricaardo,Marx
(Classical),Harrod-Domar,Solow(Neoclassical).Lewis model and the Renis-Fei Extension.
Section'B'
Development Planning:Balanced and unbalance stategies,Choice of techniques.Capital-output ratio,Investment

Criteria.NPV,IRR,Social cost Benefit Analysis.
Accounting prices,Applications of Input-Output Analysis in Planning programming,programming,approach of
planning.
Section'C'
Financing of economic development.Domestic and external resources.International trade and development

Two-gap models,plan models of India.past performance and current issues of Indian planning.
Books Recommended
1. G.M.Meier:Leading Issues in Economic Development(Latest Ed.)
2. P.A.Yotopoulous and J.B.Nargent:Economics of Development.
3. A.P.Thirlwal:Growth and Development with special reference to Developing Economies(Latest Ed.)
4. Michael P.Todaro:Economic Development in the Third world (Latest Ed.)
5. Bruce Herrick and Charles P.Kindleberger:Economic Development(Latest Ed.)
6. S.K.Mishra and V.K.Puri:Vikas Ka Arthshastra (Hindi),Economics of Growth and Development(Eng.).*
7. M.L.Jhingan:Vikas Ka Arthshastra.
Reference Books:
1. W.A. Lewis:Development Planning.
2. S.Chakravarty:Development Planning-The Indian Experience,1987
3. S.Kuznets:Modern Economic Growth.
4. A.K.Sen (Ed.):Growth Economics.
5. S.Chakravary:Economic Development and planning.
6. World Development Report (Latest).
7. Human Development Report(Latest).
8. The Economic Survey-Government of India.
9. Five year plans of India.
10. P.Bardhan,M.Dutta Chaudhary and T Krishnan:Development and Change,Oxford University Press.
PAPER-VII:COMPREHENSIVE ECONOMICS
Note:There will be two parts of the paper.Each part will be of 50 marks part-I will cover current theory portion
of all compulsory paper of M.A. and part-II will cover Indian Economics and Current International Economic
issues.
Questions in each part will be set in the following pattern:
a. 14 questions-Objective type of one mark each.
b. 12 questions-Short answers(not more than 50 words) of two marks each.
c. Three short essay type questions(not more than 150 words of 4 marks each.
There will be internal choice only in the short essay type questions.
OPTIONAL PAPERS
PAPER(I):AGRICULTURAL ECONOMICS
Note:The paper will contain nine questions having three questions in each section.Candidates required to
Section'A'
Agriculture in growing economy,changing importance of agriculture.Subsistence/traditional agriculture and its
modernization.Interdependence between agriculture and industry-Some empirical evidence.Institutional change
and technological changes,Farming system-traditional commercial,cooperative,collective and state
farming.Production functions in agriculture,resource use efficiency.
Farm size and productivity relationship in Indian agriculture.Farm budgeting.Concept of cost.Supply of
individual crops and aggregate supply.Supply price relationship.
Section'B'
Factors of production.Characterstics of factor markets.Inter-linkages between land,labour and capital

markets.Traditional agriculture.Tenancy and crop sharing.Mobility of land and segmentation in labour
markets.Role of capital and agricultural credit.Organized and unorganized capital market.Uncertainty and crop
insurance.Agricultural markets and marketing efficiency.
Section'C'
Behaviour of agricultural prices.Demand and supply of agricultural products and cobweb cycles.prices and
Income stability.Market and marketable surpluses.Role of public price and distribution policies.Stabilization
and support policies.Terms of trade between agriculture and nonagriculture.Agricultural price policy in India.
Agricultural growth in India.Inter-regional variation in growth of output and productivity.Agricultural growth in
Rajasthan.Cropping pattern changes in India.
Institutional changes-Land reforms,credit structure and marketing.Supply of inputs-irrigation,power,seed
fertilizer.pricing of inputs problem of mobilization of resources from agriculture.
Books Recommended:
1. E.D.Heady and J.l. Dillon:Agricultural production Functions.
2. T.W.Shultz:Transforming Traditional Agriculture.
3. Pranab K.Bardhan:Land,Labour and Rural Poverty in India.
4. Krishna Bhardwaj:Production and conditions in Indian Agriculture.
5. C.H.H.Rao:Agricultural Production,costs and Returns in India.
6. D.S.Tyagi and G.S.Bhalla:Agricultural Development in India.
PAPER(II):CO-OPERATION (THEORY AND PRACTICE)

Section'A'
Fundamental principles of cooperation-Traditional and reformulated once,state policy and cooperative

movement,cooperative structure:primary,central and apex level cooperatives and the inter-relationships.
Role of Co-operatives in overall development of Denish,Israeli,Chinese and Japanese economies.
Section'B'
Cooperative Movement in India:Present major trends and unresolved problems of credit marketing,dairy and
consumer cooperatives.Role of cooperative in rural development and rural industrialization with special
reference to Rajasthan.Future lines of major reforms.
Section'C'
Cooperative Management:Role of cooperative department electec non-officials and cadres of cooperative

personal cooperative laws and management.Growth of vasted interests and their eradication.Need for a de-
officialisation programme.Effective management reforms for strengthening the Movement in India.
Books Recommended:
1. T.N.Hajela:principles,problems and practice of cooperative.
2. S.R.Kulkarni:The Theory and practice of cooperation vol.-II.
3. B.S.Mathur:cooperatives in India (English & Hindi Ed.)
4. B.B.Goel:Cooperative Management and Administration.
5. S.K.Sinha & R.Sahaya:Management of Co-operative Enterprises National Council of cooperative
Training.
PAPER(III):INDUSTRIAL ECONOMICS
Section'A'
Concept of plant,firm,business house,industry and market.Business Organization in private and public corporate
sectors.Strength and structure of Indian corporate sector.Public sector in India:rationale and performance.
Industrialization and development.Backward and forward linkages.Independence of industrial sectors.
Industrial sector in India.Alternative strategies for Industrialization.Capital goods v/s consumer goods.Import
substitution v/s Export promotion in newly industrial countries and their experience.
Section'B'
Location of Industries.Theories and measures of location.Location of Industries in India.Industrial

project,selection criterion.Industrial finance money and capital-markets,development banks.Industrial finance in
India.
Section'C'
Industrial growth in India.Inter-regional variations in industrial development.Industrial policy in India.Small

scale industires,Industrial concentration and MRTP Act.Foreign collaboration in technology imports.Industrial
sickness.Policy making for Industrial growth,Effective study of the steel,cement,electronics and textiles
industries.Industrial development in Rajasthan.
Books Recommended:
1. R.R.Barthwal:Industrial Economics:An Introductory Textbook.
2. S.C.Kuchchhal:Financial Management.
3. Hay and Morris:Industrial Economics:Theory and Evidence.
4. Isher J.Ahluwalia:Industrial Growth in India:Stagnation since the mid-sixties.
5. K.V.Sivayya and V.B.K.Das:Indian Industrial Economy.
Reference Books:
1. W.Isard:Methods of Regional Analysis-An Introduction to Regional Science.
2. Chenery and Clark:Inter-Industry Economics
3. M.A.Utton:Industrial Concentration.
4. J.S.Bain:Industrial Organisation.
5. J.Bhagwati and P.Desai:Indian planning for Industrialization.
6. Productivity Trends in Cement Industry in India,National Productivity council.
PAPER(IV):PUBLIC ENTERPRISES AND PUBLIC UTILITIES

Note:The paper will contain nine questions having three questions in each section,Candidates are required to
Section'A'
Difference between public and private activities,public enterprise and public utilities.Characteristics of public
utilities-Legal and economic aspects various public utilities-railways,road and air transport,electricity
telephones,water-supply,TV and broadcasting public operations of utilities Regulation of public utilities.
Different forms of public enterprises-Departmental,company corporation,holding companies,joint
sector,Rationale and objectives public enterprises in India Central and state enterprises.
Section'B'
Principles of public utility rate making-marginal cost and full cost pricing.Concept of a fair rate of return to cost
and value of service as standards of reasonableness,fairness and functional efficiency.objective of rate making-
discriminatory pricing,railway rates and electricity tariffs finding of public utilities.ownership-private,public or
cooperative.
Planning and investment decisions,financial structure and financial analysis.Financial ratios and rate or
return.Economic analysis and benefit cost estimation.
Section'C'
Growth of public sector in India.Achievements and problems profitability and resource mobilization by public
enterprises.Recent change with regard to PSUs.Public sector enterprises in Rajasthan.A detailed study of
Rajasthan state Electricity Board and Rajasthan Road Transport corporation.
Books Recommended:
1. V.V.Ramnathan:Meaning of public Enterprises.
2. V.V.Ramnathan:Structure of Public Enterprises in Inida.
3. V.V.Ramnathan:Finances of public Enterprises.
4. E.Troxe:Economics of public utility.
5. R Turvey:Economic Analysis and public Enterprises.
Refrence Books:
1. R Turvey:Public Enterprises
2. R.Turvey and D Anderson:Electricity Economics
3. T.Haris and R.J.Sampson:public utilities.
4. Pagrum P.Duedley:Transport Economics Public Policy.
5. Mayer,Kain wohli:The urban Transport problem.
PAPER (V):LABOUR AND INDUSTRIAL RELATIONS

Section'A'
Labour Economics-Importance,old and new theories.Theoretical and institutional labour Economics.Theory of

individual labour supply and demand for labour.Wage determination.Functions and characteristics of labour
market with special reference to developing economics.
Non-competing groups and segmentation in labour markets.Rural labour market and rural-urban
migration.Todaro Harris Hypothesis.Investment in human capital.
Definition of working force and labour force.Concept of unemployment and under employment.Types of
unemployment.Estimates of unemployment in India and Rajasthan.
Employment in organized and industrial sectors in India-its size,growth and characteristics.
Section'B'
Government and labour market.Labour legislation and social security.State reputation of wages.Minimum
wages for industrial and agricultural workers wage and income policy.
Labour unions-Their role and functions.Labour unions and collective bargaining economic impact of unions.
Trade union movements in USA,Russia and India,Industrial relations factors determining industrial relations
collective bargaining in India.
Section'C'
Industrial disputes and grievances causes of unrest.Machinery for industrial and disputes in India since 1980
critical study of existing machinery of industrial relations in India.
Workers participation in ownership and management-concepts and Indian experience.Industrial Labour and
Industrial Relations in Rajasthan.
Books Recommended:
1. Dunlop:Industrial Relations system.
2. B.C.Roberts:Trade union in a free society.
3. R.N.Subramanian:Labour Management Relations in India.
4. V.G.Mhetras:Labour participation in Management.
PAPER(VI):DEMOGRAPHY
Section'A'
Morality Measures-Grade and specific rates.Life tables.Factors effecting mortality.Mortality change and
population growth.Fertility measures-crude and specific rates,gross and non reproductive rates.Factors affecting
fertility.study of fertility attitudes by special survey,Mortality rate,fertility rate,reproductive rate and population
growth in India.
Composition of population-social economic composition.Relationships of age,sex and other compositional traits
to economic and special organization.Composition of population in India.Effects of birth death and migration
rates upon population.
Section'B'
Basic principles of measurement of population growth-Estimates,census,vital registers and recortds of

migration.Continuous population registration.Methods of population presentation.Projection of population in
India.
Economically active population-Basic concepts and definitions impact of demographic process on the
composition and size of the labour force,occupational and industrial composition of work force in relation to
regional and International differences in economic development.Female participation in work force.A study of
occupation,composition and female participaation in India.Concept of Human Development.
Section'C'
Theories of demographic transition.Employment and manpower planning-Its significance and

problems.Measurement,Incidence and implications of unemployment and underemployment with special
reference to India.
Implication of population change for capital formation and employment in developing countries.Indian
Census,Family planning.NFH surveys(objectives and findings).
Books Recommended
1. G.W.Barclay:Techniques of population Analysis.
2. D.K.Bogue:Principles of Demography.
3. Coale and Hoover:population Growth and Economic Development in Law Income Countries.
4. O.S.Srivastava:Arthik Evam Samajik Janananki Shastra(Hindi).
5. Jeevan Chandra pant:Janaki (Hindi).
6. Mahboob-Ul-Haq:Reflections in Human Development.
7. Human Development Report (Latest).
8. National Family Health Survey.1 and 2
PAPER(VII):ADVANCED INDIAN ECONOMY

section'A'
Demographic aspects-Population growth, labour force, occupational distribution, poverty,unemployment. Issues

in measurement and policy options.
Agriculture-Institutional changes, technological changes. Farn price policy, Agricultral finance progrees and
emerging trends. Food situation and food policy.
Industry-Recent trends in industrial growth. Recent changes in indusrial policy and licensing policy and
licensing policy. Concentration feconomic power in private sector and MRTP Act,Public sector industries-
Growth problems of pricing and measurement. Role of public financial institutions Role of multinationals in
development. Indian industries.
section'B'
Foreign Trade - Main trends in imports and expors foreign trade policy-Import substitution and export
promotion. India's balance of payments position in recent years,Major monetary and banking trends problem of
inflation Black money. Monetary and credit policies Main issues in banking development.
Fiscal development - Trends in taxation and public expenditure at the central level. Central State Financial
relations. Resource mobilization for planning - Role of taxation, borrowing, deficit financing and administered
prices for plan financing . Long term fiscal policy for India.
section'C'
Indian Planning - Strategy and objectives Development policies Saving and investment rates, Foreign capital
and technology transfer to India.
Institutional framework of Indian economy and its structural changes during plan period. Economic growth
during plan period Recent economic reforms in India.
National income-growth and composition regional distribution. Income inequalities in Indian, Concentration
Rations policy for imporving income and wealth distribution in India.
Books Recommended :
1. A. N Agrawal : Indian Economy (Latest Ed.).
2. Rudradutt and Sundram : Indian Economy (Latest Ed.)
3. A.N. Agrwal : Bhartiya Arthshatra (Latest Ed.)
4. Rudradutta and Sundram Bhartiya Arthshastra (Latest Ed.)
5. Laxmi Narayan Nathuramka : Bhartiya Arthshastra(Latest Ed.)
Refrence Books:
1. Mishra and Puri : Indian Economy.
2. Kurion C.T. The Economy : An Interpretative Introduction, Sage Publications.
3. Kapila Uma (Ed.): Indian Economy since Independence Academic Foundation, New Delhi.
4. Kapila Uma )Ed.): Recent Development in Indian Economy Pt-I,II,III. Academic Foundation, New
Delhi.
5. Jalan, Bimal: The Indain Economy: Problems and Prospects.
6. G.Rangarajan: Perspectives on Indian Economy.
Paper (VIII): INDIAN BANKING SYSTEM

Duration 3 Hours Max.Marks : 100
Note: The paper will contain nine question having three questions in each section Candidates are required to
attemp five questions in all selecting at least one question from each section.
section'A'
Indian Banking System as on the eve of bank nationalization. Management problem of commercial basnks
during the last one decade. Emergency of social banking and its progress. Priority sector advances and advances
to weaker sections and their problems of recovery.Non-performing assets of commercial adequacy. New
innovations related to banking business. Cost and pricing of banking services.
section'B'
Internationalisation of banking service in India-de-regulation, liberalization and competition among banks (New
challenges for indian Commercial Banks).
Present and future HRD needs for bank employees in India Recruitment, Training and appraisal of bank
officials since 1990s.
Rural Banking - A critical review of the contribution of major credit cooperatives commercial banks and
regional Rural banks including that of the NABARD.
Development Banks - Kinds, role and achievements of all India development banks for industries and foreign
trade.
section'C'
Money and capital markets in India-Features, instruments availability of funds and major problem of principal
market-partners. RBI's monetary and credit policies as enforced since the beginning of the 1990;s their
objectives, contribution to economic growth and price stability and overall effectiveness.
Books Recommended :
1. S.B. Gupta: Monetary Planning for India (Latest Ed.)
2. K.Rao: Management of Commercial Banks.
3. L.M. Bhole: Impacts of Monetary Policy.
4. Harendra Badhav (Rd.) Challenges to Indian Banking Commpetition, Globalisation and Financial
Markets McMillan, 1996
5. N.S. Yher: Non-Perfoming Advances in Banks, Skylark, New Delhi.
Refrence Books:
1. Report of the Commitee (Narsimham) on the Financial System Nov., 1991.
2. I.B.A. Bulletin: Annual Special Issues,1994,1995 & 1996 RBI Report on trend and Progress of Banking
in India (Latest Ed.)
3. Hanson and Kathuria (ed.) A Financial Sector for the 21stCentury Oxford. University Press.
4. Y.V. Reddy, Monetary and Financial Sector Reforms in India, UBSPD, New Delhi.
PAPER (IX):INTERNATIONAL FINANCE

Duration : 3 Hours Max.Marks: 100
Note: The paper will contain nine questions having three questions in each section. Candidates are required to
attempt five question in all selecting at least one question from each section.
section'A'
Finance Function - Sources and Uses. International capital movements - classification and role in developing
nations. Foreign Direct Investment, Foreign portolio investment and financial instability.
International Financial System and Globalization-developments in Exchange Markets. Eurocurrency markets,
Asian Dollar Markets and International Bond Markets. Principles of International Financial Management.
section'B'
Foreign Exchange Market - Structure, Kinds, instruments of payments, functions, exchange trading. exchange
risk, arbitrage and specu lation.
Foreign exchange rate- meaning, determination of equilibriur exchange rate, theories of exchange rate and
exchnge rate systems.
Balance of payments - meaning,components, disequilibrium in Bops, its causes and remedial measures.
Open Economy Macro Economics - Bops equilibrium and adjustment mechanism (automatic and policy)
Trends in India's Balance of Payments and growth of foreign exchang reserves since the beginning of the 1990s.
section'C'
Global Business Finance. Long term borrowing from World Bank Asian Development Bank and Aid India Clup
nations and its overall impason Indian economy. International Monetary Systerm and alternative international
monetary standards. IMF and problem of international Liquidity. Optimum currency areas. Theory of
international reserves. WTO and its impact on differect sectors of the economy. Regional Blocks-
Multilateralism and World Trading System.
Books Recommended :
1. Grabbe J. Orlin: International Financial markets, Prentice Hall, Inc. Englewood cliffs, NJ, USA.
2. Daniel R. Kane: Principles of International Finance, Croom Helm Ltd.
3. Harold James: International Monetary Cooperation since Biretton Wood, IMF.
4. Peter B. Kenen (Ed): Managing the World Economy: Fifty Years after Bretton Wood.
5. Pater Kenen: International Economics,Cambridge University Press.
6. Bo Soderster and Geofrey Reed: International Economics MacMillan.
7. John Millar (Ed) Curing World Poverty.
8. IMF: International Capital Markets. Development Prospects and policy Issue.1994.
9. Lovi-Maurica: International Finance, McGraw-Hill.
Refrence Books:
1. World Bank: Annual Conference o0n Development Economics.
2. world Bank: Anuual Reports
3. ADB: Annual Reports.
4. IMF/World Bank: Special Issue of Finance and Development of Financial Market.
5. BIS: Annual Reports.
6. Reserve Bank of India: Monthly Bulletin
7. Reserve Bank of India: Report on Currency and Finance.
PAPER (X): HISTORY OF ECONOMIC THOUGHT

Duration 3 Hours Max.Marks : 100
Note: The paper will contain nine question having three questions in each section Candidates are required to
attemp five questions in all selecting at least one question from each section.
section'A'
Mercantalism, Physiocrates, Quesnay's Table Economic. Concept of Surplus, growth theory taxation and role of
Government.
Classical school- Adam Smith, the invisible hand doctrine, Wealth of Nations, Laissez faire, Profits and wages.
Modern revival of Adam smith, Critiques of Adam Smith.
Malthus's theory of population and theory of under-competition. Ricardo-Principles of Polictical Economy and
Taxation. Distribution theory -different rents. Differences with say on determination of value. Modern revival
and interpretation (Sraffa).
section'B'
Crititics of the classical school -Sismondi, Socialist and the nationalist school Re-statement of the classical
position. Senior and the four postulates. J.S. Mill-four prepostions and capital demand and supply bi-furcation
wage fund.
Rehabilitation by Cairsness, Stationery State Version non-com peting groups.
Evaluation of socialist thought -Utopian,Socialism Saint Simon, Own Blane,Fourier, Proudhob,Scientific
socialist.
section'C'
Karl Mark - Efforts at scientific socialism. Organic composition of capital. Break down of capitalism. Revival
of Marx in Economics. The German Historical School and the development of Marginalism. The neo-classical
school.Marshall.
Twentieth century economic thought-main features (only the rise of Keynesianism, the rise of mathematical
Economics, dynamics and econometrics)Critical evaluation of the development of economic thought Indian
economic thought - Kautiya and Gandhi
Books Recommended :
1. H.Haney: History of Economic Thought.
2. Eric Roll: History of Economic Thought.
3. Gide and Rist: History of Economic doctrine.
4. V,C, Sinha: Arthik Vicharon Ka Itihas
5. K.L. Rangaswami: Aiavangar: Aspect of the ancient Economic Thought.
6. J.C. Kumarappa: Gandhian economic Thought.
PAPER (XI): MATHEMATICAL ECONOMICS

section'A'
Theory of Consumer Bohaviour - Concavity of a Utility Function Convexity of an indifference curve.

Maximization of utility. Derivation of demand functions-Ordinary and compensated demand functions.
Elasticity relations in demand theory - Engel Aggregation Condition and Cournot Aggregation Condition.
Income and Leisure - Derivation of labour supply function.
Slutsky Equation - 2 and n-commodity cases, elasticity form and important results.
Types of Utility functions - separable and additive, homogeneous and homothetic, direct and indirect. Roy's
Identity, Linear Expenditure System.
Restrictions on demand functions
Theory of firm: Production fuction-A well behaved production function, Cobb-Douglas and CES Production
Functions, Homogeneous production function. Optimization behaviour of a firm-profit maximization
constrained cost minimization and constranined output maximization.
section'B'
Elasticity of substitution (s) derivation of its expression and calculation of value of s for CDPF and CESPF
Special cases of CESPF
Derivation of Cost and input demand function
Perfect Competition: Market demand and supply function Determination of price and output of a firm. Effects
of specific and ad valorem taxes. Stability of equilibrium-Marshallian & Walrasian Stability Conditions.
Lagged adjustment -Cobwed Model Consumer's surplus and producer's surplus.
Monopoly: Profit Maximization and sales revenue maximization Multi-Plant Monopolist price discrimination
effect of various taxes (Lumpsum tax profit tax specific tax and ad-valorem tax) on output and price of a
monopoly firm.
Duopoly Collusion, Cournot, Stakelberg and market sharing models.
Factor Market Elasticity of factor demand and Marshall's four rules.
section'C'
Macro Economic Models Keynesian theory of income determination concept of Multiplier derivation of IS and
LM functions Multiplier-Accelerator interaction. Trade Cycle models of Samuelson and Hicks
Growth Models: Harrod-Domar Kaldor, Solow and Meade.
Linear Programming Simplex method Duality theorems problem of Degeneracy.
INput-Output Analysis-Concepts of static, dynamic closed and open input - output models. Hawkings-Simon
conditions of viability Determination of gross output and value added.
Theory of Games: Two person-constan sum games.Maximin and Minimax Pure and mixed strategies
Note: Use of non-prorammable calculator is permitted.
Books Recommended :
1. J.M. Henderson and R.L. Quandt: Micro Economic Theory: A Mathematical Approach, McGraw-Hill.
London.
2. RGD Allen, Mathematical Economics.
3. B.C. Mehta: Mathematical Economics: Micro Economic Models, Sultan Chand & Sons, New Delhi.
Refrence Books:
1. Alpha C Chiang : Fundamental Methods of Mathematical Economics, McGraw-Hill, Kagakusha,
Tokyo.
2. R.G.D. Allen, Macro Economic Theory: A Mathematical Tratement, McGraw-Hill London.
3. Michael K. Evans: Macro Economic Activity: Theory, forecasting and Control.
4. B.C. Mehta and G.M.K. Madnani: Mathematics for Economists, Sultan Chands & Sons,New Delhi.
5. H.S. Agrawal: Kimat Siddhanton Ka Ganitiya Vishleshan, R.B..S.A. Publishers, Jaipur.
PAPER (XII): ECONOMETRICS

section'A'
Nature and scope of Econometrics, Mehtodology of Econometric Research Random Variables, Statistical
Inference.
Simple linear regrassion model (2 variables), Estimation of regression parameters by Ordinary Least Sqyares
(OLS) method and maximum likelihood method. Properties of estimators, Test of significance, confidence
interval and Anaylsis of Variance. Various functional forms of regression models.
General linear model (n variables, matrix notation) -Estimation of regression parameters by least squares
methods. Properties of estimator. Test of significance. Aitken estimator.
section'B'
Violation of basic assumption-Autocorrelation,multicollinearly. heteroskedasticity and specification error. D-W

statistics. Distributed lag models-Koyck approach, adaptive expectations and partial adjustment models Almon
approach.
Dummy variable.
Panel data-pooling of cross section and time series data, models fixed effect and Random effect.
section'C'
Simultaneous equations model: Stuctural form and reduced form. Identification problem. Derivation of Order
and Rank conditions. Estimation of simultaneous equations model-Ordinary least squares (OLS) Indirect Least
Squares (ILS) and two stage least squares (2SLS) methods.
Applied Econometrics: Estimation of Demand, Cost of Production Functions. Forecasting.
Note: Use of non-programmable calculator is permitted.
Books Recommended :
1. J.Kmenta: Elements of Econometrics.
2. Damodar Gujrati: Basic Econometrics.
3. J.Johnston: Econometrics Methods(3rd edition).
4. G.S. Maddala : Econometrics.
Refrence Books:
1. R.S. Pindyck and D.Z. Rubinfield : Econometric Methods and Econometric Forecasts.
2. Rao and Millar : Applied Econometrics.
3. H.Theil: Principles of Econometrics.
4. Michael D. Intrilligator : Econometric Models, Techniques and Applications.
5. J.Johjnston and J. Dinardo: Econometric Methods.(4th edition).
6. H. Greene: Econometric Analysis.
7. G.M.K. Madnani : Artthmiti - Avdharnayen Evan Vidhiya.
PAPER (XIII): SURVEY METHODS

section'A'
Sampling Methods. Principles Sample Surveys. Stages of Survey. Practical problems in planning, execution and
analysis of survey. Random number tables and their uses in samples with equal probability (Simple random
sampling) and proportional to size. Sampling and non-sampling errors. Concept of Sampling Distribution and
simple uses of t,and X2 (chi Square)
Mathaematical Expectation and Variance. Properties of Expoection and Variance.
Point and Interval Estimators, properties of estimators: Unbiasedness, Effeciency, Consistency and Sufficiency.
Testing of Hypothesis, Errors of Type I and II.
section'B'
Sampler Designs : Simple Random Sampling with & without replacement, relatives effeciency of WR and
WOR.
Stratified Samplings. proportional optimum and Neymann allocation. Gain in precision, Cluster sampling. Two
stage sampling. Systematic sampling.
Indian official statics, sources of data on national income and its components, price indices, public finance,
monetary and trade statistics. Estimates of Poverty and Consumption by NSSO.NFHS Surveys.
section'C'
Regrassion analysis with one and two explanatory variables Multiplicative and additive models. Growth and
models. Growth and elasticity equations
Estimation of regression parameters and their standard errors Interpretation of estimated with all the summary
statistics viz, Standard errors, exponential and parabolic curves. Application in the estimation of elasticities and
growth rates. Simple econometric analysis of time series, unit roat Analysis.
Note: Use of non-programmable calculator is permitted.
Books Recommended :
1. M.N. Murthy : Sampling Methods.
2. P.V. Sukhatme, B.V. Sykhantme and C.Ashok : Sampling Theory of Surveys with Applications.
3. Cochrance: Sampling Techniques.
4. S.C. Gupta and V.K. Kapoor : Fundamentals of Applied Statistics.
5. Damodar Gujarati,Basic Econometrics Statistics for Business and Econmomics,Anderson,Suweenly
Williom,Thomson
ECONOMIC GROWTH AND DEVELOPMENT
Introduction
Economies grow and develop, they expand and advance, and they progress and prosper. There are phases when they decline too, and there
are economies that experience continuous decay. If one considers long stretches of human history, one knows that economies (civilizations)
disappeared altogether. We will not take into account such long stretches of time. We shall not consider too distant a past either. We will
leave them to historians, may be, economic historians.
Let us take a normal view. We shall then accept decline as an occasional, temporary phenomenon. We shall, therefore, use positive terms
only. Of the positive terms, which have been used to describe changes as well as to prescribe changes, two have survived. They aregrowth
and development. Because we shall primarily look at nations and countries as economies, and use terms such as ‘economic growth’ and
‘economic development’. We shalloften try to distinguish ‘economic’ from ‘noneconomic’ though there are cases where it becomes difficult to
do so.
In order to accommodate decline in level, we use phrase ‘negative growth’ and to describe perverse tendencies, we may use words ‘de-
development’ or ‘maldevelopment’ though, we will not have occasions to use them.
You may find that, sometimes in many scientific treatises and very often in colloquy, words ‘growth’ and ‘development’ are used in
interchangeable fashion. But, normally a distinction is made between the two, particularly in economics literature. It is maintained along the
following lines. You might have noticed that the word ‘growth’ is used to describe increase in stature or size. It is used to describe a uni-
dimensional change, as in the case of stature of a child or a uniform expansion in all directions, as in the case of size of a balloon. Even when
we refer to development of a child, we refer to various dimensions of its personality. When we do not refer to dimensional aspects we use the
word ‘growth’. Even schools and institutes,colleges and universities, hotels and hospitals grow. But, we are often quick to point out certain
features that are not captured by word ‘growth’. It is rare, if ever, that growth takes place without development or development takes place
without growth. In most cases, they would accompany each other. There may be cases when one is dominant and the other is dormant. In
such cases, people talk of growth without development or development without growth. It is, therefore, good to make an analytical distinction
between the two.
Economic Growth
Let us take here a comprehensive view of the economy, taking all activities together, and call its growth as economic growth.
Let us look at it from the view point of production. The total quantum of goods and servicesproduced in an economy in a given year is
referred to as Gross Domestic Product. Let us measure it at factor cost and write it in its abbreviated form GDPFC. The GDPFC in 2000-01 was
around Rs 17,00,000 crore. This is a flow of goods and services produced during the year 2000-01, measured in value terms. We may be
interested in knowing whether the flow this year is larger than the flow last year. If so, we should know the measure of the flow last year. In
order to see that we measure the ‘real’ change in flow, we should compute the magnitude of flows in both the years in the same prices. The
prices may belong to 2000-01 or 1999-2000 or to 1993-94; the point is that the prices should relate to only one common year so that we
measure only the change in flow of output, not a mix of change in output and change in prices. Such GDPs are said to be measured at
constant prices. Suppose you look into a recent issue of the National Accounts Statistics published by the Central Statistical Organisation and
find that at 1993-94 prices, the GDPFC for 1999-2000 and 2000-01 are Rs.10,00,000 crore and Rs.10,60,000 crore respectively. The growth
in flow called GDPFC in absolute terms is Rs.60,000 crore. In relative terms it is 6 per cent and it is called growth rate. If we prepare a whole
series for 10, 20 or 50 years then we often add words ‘per annum’ or ‘per year’ to growth rate. The growth rate is often expressed in terms of
per cent per annum. This is a positive change; there could be a negative change also.
Suppose, we look at a twenty-year period and use yearly figures for flow of output of goods, which is measured in terms of GDPFC at
constant prices. The growth rates calculated on yearly basis would differ from year to year. Shall we use nineteen year-to-year figures of
growth rate, some of which may be negative, to describe the change? Or, should we just compare the initial figure with the final figure? If we
adopt the former, how to summarise the nineteen figures? If we adopt the latter, it is possible that one of these (initial or final) figures is just
‘abnormal’ as it does not fall in line. Would it not be a good idea to speak of general tendency and ignore abnormal fluctuations around the
general tendency of increase?Economic growth should, therefore, be taken as a long-term tendency reflected by increase in flow of
final goods and services produced by the economy.
If there is a general tendency of growth but there are occurrences of decline, the rates of growth will be negative in certain years. Shall we
then say that, while the potential of economy to produce is continuously increasing, the potential is sometimes not realised? There could be
various reasons for occasional decline. In economies that depend to a large extent on external trade conditions in other countries may affect
the realisation. Monsoon may widely fail in certain years and economy may get derailed for a while. Internal demand may for a variety of
reasons fail to make full use of the potential. Some economists put too much emphasis on supply potential and ignore demand conditions.
They define economic growth as long-term increase in production potential of the economy. Some economists feel that it is growth of per
capita GDPFC, not GDPFC, that should be used to gauge the growth of an economy. But the point to be noted is that economic growth is a
long-term phenomenon about the change in total economic activity of an economy.
Economic Development
Some economists hold a view that the economic development is not much different fromeconomic growth. For them, both are processes of
long-term increase in per capita income. Some other economists believe that development is distinctly different process than growth and
covers other dimensions of change besides growth. Still others hold that, development is nothing but the level of per capita income achieved
in a particular year.
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Whole human history may be thought of as a succession of developments or changes, largely in positive direction. Looking from a distance,
we find that production structure of the economy has changed: from hunting-gathering to settled agriculture, from agriculture to
manufacturing, from manufacturing to automatic production, from production of goods to production of services. It does not mean services
were not produced, say thousand years ago; it only means that its relative importance has changed and that this might have occurred with
increase in all activities in a broad sense.
However, economics takes most of its lues from the economic history of the West during the last two centuries or so. During this period, a
variety of sweeping changes took place in Europe, which may broadly be categorized as technological and institutional. Early economists
working in the field of development economics took notice of change in the composition of output and deployment of labour in activities. They
called it structural change. Structural change meant relative increase in terms of proportion of non-agriculture/nonprimary output and
concomitant changes in proportion of employment of labour in non-agricultural activities (and also in that of allocation of capital and land).
However, this structural change has to take place along with increase in output of all (or majority of) goods, not with decrease. They
defined economic development as economic growth with structural change in favour of nonagricultural activities. And structural change was
understood in terms of composition of GDP and industrial distribution of labour. This was a reflection of changing demand for goods and
services on the one hand and changing demand for labour by production technology in different sectors on the other. Most of the mainstream
economists believed that all economies in the West traversed the same path and believed that other economies would also follow the same
path. When they did not find it happening they pointed out that institutional changes are equally important. Institutional changes could mean
emergence of new institutions in governance, as also in capital market and money market. Some pointed out necessity of attitudinal changes
in people – a leap from traditional value system to modern value system. In order to accommodate this thought, economic development could
be defined as economic growth plus, that is, something more than economic growth. There were attempts to emphasize technological
dimension of development. It was pointed out thateconomic growth should be accompanied by rise in productivity. Then, we could
defineeconomic development as economic growth accompanied by rise in productivity.
Development is, however, just not concerned with description of economic history. It is to be pursued as a deliberate mechanism of
deliverance of the masses from poverty and idleness in a relatively short period of time. Developments in the fifties and sixties did not
perceptibly change the scene in these crucial areas. Many economists felt disillusioned and started showing their anguish. One such Western
economist who had been dealing with problems of development asserted in a World Conference in Delhi: “The questions to ask about a
country’s development are: What has been happening to poverty? What has been happening to unemployment? What has been happening to
inequality? If all three of these have declined from high levels, then beyond doubt this has been a period of development for the country
concerned. If one or two of these central problems have been growing worse, especially if all the three, it would be strange to call the result
‘development’ even if per capita income doubled.”
Indeed, here is a reference to conscious attempts made to develop an economy by adopting a strategy. If the strategy brings in growth in
capacity to produce more and in actual output, transformation in structure of economy in terms of composition of output of goods and
services or even in deployment of labour force, emergence of institutions in terms of variety of banks, and technology making use of
machines and power instead of men and cattle, but makes no significant dent on basic problems of underdeveloped countries, what use are
the efforts or the strategy? This implies that development has to be related to welfare of people. It was suggested much earlier that welfare
of people depends on the size of the cake as well as its distribution. One is entitled to one’s wages when one is employed. One should get
adequate wages, if employed or should get remunerative prices for what one produces, if self-employed. Mass poverty was one particular
problem we attributed to the colonial rule and wanted to secure self-governance in order to eradicate it. If that scourge still persists on a
large scale, we have a cause to worry about. In short, the suggestion is that the income should get redistributed in favour of relatively worse-
off. Keeping this in view, some economists prefer to define economic development as economic growth with redistribution of resources in
favour of the relatively worse off. In this concept, it is believed that reduction in inequality will reduce poverty and will lead to reduction in
unemployment too.
Sustainable Development
In recent years an important issue has arisen. The issue is whether the level of development, even in a developing country where it is fairly
low, is sustainable. In developed countries, the major cause of worry about sustainability of development is supposed to be a wasteful
consumption style and in many developing countries, the cause of such worry is said to be large and increasing population.
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In this context, there are two facts, which are brought to our notice. One, present production technology makes use of non-renewable
(exhaustible) natural resources such as fossil fuels (coal, gas and petroleum) or even of renewable natural resources (such as forests, animals
and water) to such an extent that their regeneration becomes difficult. Two, present production technology (along with disposal practices of
waste) pollutes atmosphere and water bodies with garbage, litter, smoke and other poisonous gases. The more goods you produce, more
non-renewable natural resources get exhausted and our environment become further polluted. Nature has some assimilative capacity. But, if
pollution level is too high, the nature may not be able to assimilate it. Clean air and clean water may not be available to us. There may not be
enough trees around us to clean our atmosphere and we may have to suffer from various health problems. If non-renewable natural
resources deplete fast, future generations may not have enough stock for its use. It means that if we continue growing our economies the
way we do, there may come a point when it may become impossible to continue with the level of development reached. Sustainable
development may, therefore, require the preservation of stocks of resources, including environmental resources and exhaustible natural
resources.
A study in 1972 had tried to show that limits to growth on the planet will be reached sometime in next hundred years if present growth trends
in world population, industrialization, pollution, food production and resource depletion were to continue unchanged. There is little reliance, in
this view, on future development of technology, which may enhance productivity through efficiency. Some do point out that there would then
be no mining and no industry. However, it is always prudent to be cautious. Before constraints loom large, it is not a bad idea to apply
restraint. The message is that the pattern of growth may have to be changed in certain economies and in others, the level reached may have
to be maintained rather than substantially enhanced. Many analysts do not segregate environment; they suggest that it does not respect
national boundaries.
Irrespective of where green house gases are produced, global warming will take place. If ozone layer withers, whole humanity will suffer from
its consequences. Concerned with environmental degradation, a world commission was set up in the recent past, which produced a report in
1987 under the title ‘Our Common Future’. This report definessustainable development as that level which takes care of the needs of the
present generation without compromising the needs of the future generations. We normally discussed development as process not as level.
The definition of sustainable developmentcan, therefore, be modified as a path of development in which options of future generations are not
compromised by the path taken by the present generation.
It is indeed difficult to determine the path that is sustainable or to find out whether the path is unique. It simply makes us cautious about our
choice over consumption style and efforts in inventing technology and perhaps restraining growth in population.
Quality of Life
One shred of quality of life is already indicated in earlier section on sustainable development. If quality of air, quality of water and quality of
sanitation are not good, thequality of life also will not be good. If our surroundings are littered, if the air is polluted or if we do not get safe
drinking water, then we will not have a good life, no matter how much of many desirable goods we are able to buy from market. One can add
availability of food, clothing, shelter, education facilities, health care, legal aid and security to the list of clean water, clean air and clean
surrounding in order to define the quality of life.
However, there is another shred of thinking which is not altogether unrelated to it. Those who suggest the other line, point out that the items
listed above are determinants of well-being. We can think about quality of life in terms of its constituents too. The items listed above lead to
better health, welfare, freedom of choice, and basic liberties, which are all indices of well-being. One should also be interested in distribution
of well-being along gender, caste, class or regional lines. Many analysts hold that a society with somewhat overall lower literacy rate but
equality between male and female literacy rates is better than another that has somewhat higher overall literacy rate but has gross inequality
between male and female literacy rates.
Some people also think that certain rights, which people enjoy in certain societies, are denied in others. These rights should also be included
in this set of well-being indicators even though they do not fall in the economic category. This argument is acceptable in the sense that life
cannot be separated into economic and non-economic compartments. Most of us would not prefer to be put in prison for any considerable
period even if food, clothing, shelter and healthcare provided in the prison is far superior to what we normally get outside. Therefore, it is said
that, political rights and civil rights or some indicators reflecting these rights should be added to the quality of life. With increasing concern for
human rights, it would be a good idea to incorporate these indicators of well-being and welfare. After all, the whole purpose of consciously
developing a society is to raise the level of well-being and welfare of its people.
The idea of ‘quality of life’ enriches the concept of ‘standard of living’, which is generally thought of in terms of rich food, expensive clothing,
luxuriant cars and palatial houses, often manifestation of high income. In societal terms, it is captured through per capita income. But
the quality of life idea adds the dimensions, which at times may not be captured through monetary valuation.
Indicators of Development
Introduction
You may recall that we have defined economic development as a process but also referred to it as a level.
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In this subunit, our attention would be focussed on the level of development achieved at a given point of time (given year). In fact, in this
conception, you may note that growth is a quantitative change between two levels of development or levels of development at two points of
time. Growth is basically an inter-temporal comparison. For comparison between two economies, which we often resort to, there exists no
such term. But such a comparison is often made. Most people would agree that development is a process and the process is multi-
dimensional. When any process is conceived as multi-dimensional, it becomes difficult to adequately capture its character through any index.
However, some attempts have been made to measure the level. We shall discuss four alternatives to measure the level ofdevelopment: Per
Capita Income, Physical Quality of Life Index, Human Development Index and Quality of Life Index.
Per Capita Income
Gross domestic product is supposed to measure the level of output produced by the economy during an accounting period. However, the
command of people over goods is somewhat different than GDP. We have our property outside our own national economy and some of our
nationals work in other countries. As a result, we earn wage income or property income outside the country. Similarly, foreigners have
property in our economy and some foreigners do work here. Adjusting for these incomes, we get gross national product (GNP). In the case of
large countries and countries having little interaction with other countries for factors of production, GDP and GNP are not very different. But,
there are economies where GNP and GDP are quite different. In our case, GNP is somewhat less than GDP. It may be noted that GNP better
represents the entitlement of the nationals of a country (individuals and their collectivities) while GDP actually shows the output of the
activities carried out within the economic boundaries of the country.
Still further, we should take account of consumption of fixed capital in the process of production. We should ensure that the capital stock is
kept intact during the year; otherwise, we shall, one day, eat away the whole of our fixed capital. So, we should subtract that amount of
capital, which we think has been consumed in the process of production. Then, what we shall get is known as Net National Product (NNP). Net
national product is also known as the national income. We shall use a particular version of net national product known as net national product
at factor cost and designate as NNPFC.
Now, if we want to compare the welfare of people at two points of time or of two economies at the same point of time, it becomes necessary
to find out the size of population. From the view point of welfare or well-being of the people, for which development is pursued, it is
suggested that the NNPFC, valued at constant prices, should be divided by the size of the population. NNPFC divided by population is
popularly known as per capita income. It helps us to compare the level of development of the country in 2001 when we are 100 crore with
that in 1961 when we were 43 crore only. In order to render international comparisons meaningful, national incomes should be divided by
sizes of their respective populations. Otherwise a country like Canada, which by all standards, is considered a rich country, could be found to
be poorer than India. The population of India may be 30 times that of Canada.
Such a division (deflation/normalisation) is needed even to assess the progress over time. For example, our NNPFC has grown a little more
than eight fold over the last fifty years but the population has also almost trebled during this period. As a result, per capita income has grown
less than three times. Our living conditions can be expected to have become better by a factor of three rather than by a factor eight.
With this in view, per capita national income has come to be increasingly used. In short, it helps us to compare the development of India with
that of the USA or with that of Pakistan for any given year as also our own development over time. We may further note that it is this
indicator, which is often used to categorise countries as developed/ underdeveloped countries or high/ middle/low income countries. In the
case of international comparison, per capita incomes of different countries have to be brought to a common currency.
However, it is very often pointed out that its scope is quite limited. Most of the limitations arise from the numerator whatever it may be,
namely, GDP, GNP or NNP. These concepts do not account for the economic activities performed inside the household, which are non-
marketed. Bulk of women’s household work gets ignored, while it is equally important fromthe point of view of well-being and welfare of
people. It does not adequately capture activities performed even outside household. As production is valued in terms of market prices,
activities for which there does not exist market do not adequately get accounted for. It is also pointed out that economic welfare, which it can
measure, even though imperfectly, is not the total welfare that the people look for.
Indicators of Development
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The following three suggestions have been made for correcting the weaknesses of the measure of per capita income:

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 Distribution of national income over individuals is an important dimension, which cannot be ignored. National income and its
distribution, both, have to be considered together. It has been argued that the welfare of a society depends on what is the size of
the cake and how it is distributed over people.
 Over time, people have come to enjoy more leisure, which, according to many, may be the ultimate aim of all activities. It has,
therefore, been argued that its value needs to be added to the national income in order to make it yield a better measure of
welfare.
 A suggestion was also made to deduct the social cost of harmful effects in terms of variety of pollutions that many economic
activities entail.
Evolution of Alternative Measures
These corrections, however, did not leave many people satisfied and national income or its per capita variant as indicators of welfare have
been in use for long though with reservations. However, in the last few decades, some attempts have been made to develop some
alternative indicators of economic welfare and of social development. Search for better indicators of social development has continued. We
often read in the newspaper that Sri Lanka has a fairly high life expectancy, low infant mortality and good literacy levels. The levels in Sri
Lanka are comparable to their counterparts in developed countries. Our own state Kerala has done wonders on literacy front as well as on
demography front. Tamil Nadu is also faring well. Therefore, it was natural for researchers to try to develop such indices as would capture
these social dimensions.
There is an UN institution called United Nations Research Institute for Social Development(UNRISD). In this institute, people tried to
develop such indices as would encompass social, political and economic variables (indicators) impinging upon industrialisation, urbanisation
and modernisation. They went on enlisting indicators, which they thought, reflected some or the other dimension of development. At one
stage, they listed as many as 73 indicators though, finally, they selected only 16 as it was found that many of the indicators were reflected
through others. hospital beds and number of doctors per lakh of population. They also included enrolment rates, electricity consumption and
steel consumption per head. Length of metalled roads, number of villages electrified and availability of post offices also got their way into it.
So did the character of agricultural organisation. These are important indicators and are considered by many as the ends in themselves.
A question was, however, raised: whether inputs can be taken as development indicators. While enrolment rate indicates an input, literacy
rate shows the output. While hospital facilities indicate inputs, life expectancy shows the output. If you have better sanitation, you have
better health and you require less of hospital facilities. Even income is in a way an input. Researchers and policy-makers were not very
happy with such alternatives to nationalincome as welfare measures as they did not find the approach suitable to produce a meaningful
social indicator. Attempts were, then, made to develop composite index ofdevelopment, purportedly based on aims and objectives
of development or outcomes of thedevelopment process rather on the means thereof.
Quality of Life Indices
We may recall the constituents of quality of life in the previous chapter. They were generally indicated as health, freedom, education,
environment, etc., the things that you directly enjoy. Based on these parameters, attempts have been made in the recent past to construct
indices, which may, broadly, be called indices of quality of life. In fact, longevity and Foreign trade per capita, 1960 US $ Percentage of
salaried and wage earners to total economically active population While at your level, it is not necessary to go into the nitty-gritty of the
ways the indices were developed, an idea of the variables that were included in such attempts could be of some interest. The variables
included are per capita income, literacy have undisputedly been accepted as parameters of quality of life. We shall be studying two popular
indices, viz., Physical Quality of Life Index (PQLI) and Human Development Index (HDI), which have both used longevity and literacy as
basic constituents. There is, indeed, an attempt to measure quality of life and we will make reference to it towards the end. It is important
to remind at this stage that these indices were developed in the international context and were used for ranking
different countries according to numerical value of achievement in descending order. The indices are simple arithmetic averages of
normalised aggregates for society/groups.
Physical Quality of Life Index

Towards the end of the seventies of the past century, Morris David Morris perused the variables adopted by several UN Committees, the
UNRISD, and the OECD developmenteconomists. He found that most of the indicators were inputs to development process rather than
result of the development process. These indicators reflected the belief that there exists only one course of development. It implied that
economically less developed countries are simply underdeveloped versions of industrialised countries. This view has certain biases and
value-bias of Europe. It overlooks the diversity among the underdeveloped countries and the differences in social organisation in different
economies. Moreover, such efforts seem to measure development as an activity rather than as an end. He, therefore, proposed a set of
criteria for developing a composite index of development. He further proposed that indicators chosen should reflect results and social
distribution of results and should not reflect values of specific (Euro-American) societies. Composite index should be simple to construct and
easy to comprehend and should lead itself to international comparison.
Choice of Indicators
Morris, therefore, tried to look for those indicators, which were the results of the development efforts, were not the values of particular
societies as there could be non-market, non-urban, non-industrial or non-plan ways to develop.
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They should create no problems in international comparison. Out of hundred and odd indicators, he could find only three which could have
universal appeal as ends in themselves and meet the criteria laid down. These are:
1 Life Expectancy (LE),

2. Infant Mortality (IM), and
3. Basic Literacy (BL).
These three indicators could be improved in a variety of ways. Whether a country should attain higher life expectancy through better medical
facilities or better sanitation or better nutrition, is not really important. But it is universally accepted that a country should have high life
expectancy. Whether a country should have a higher rate of basic literacy through formal channels or non-formal channels is not important.
But a country should try to attempt for higher level of literacy is the point. This is also almost universally accepted. Whosoever is born will
die, is accepted but those who have been born should not die as children in infancy. This is the point generally accepted. Now, there is a
technical issue. Normally, life expectancy at birth is the index used. Infant mortality refers to deaths before age one. Therefore, Morris
suggested that life expectancy at age one should be used instead of life expectancy at birth. In case, the figure for life expectancy at age one
was not available, it could be worked out by using a formula, which relates life expectancy at birth, infant mortality and the proportion of
children. Normalisation of Indicators We know that life expectancy is measured in terms of years, infant mortality rate in terms of per
thousand and basic literacy rate in terms of percentage. They cannot be simply added. Further, while basic literacy rate can have a natural
zero for minimum and 100 for maximum, there exist no natural minimum or maximum values for other indicators. For the purpose of
comparison, each of the levels should, therefore, be normalised. Morris chose the best and worst levels in each of the three cases. In the case
of positive indicators of life expectancy and basic literacy, the best is denoted by the maximum and the worst by the minimum. But, in the
case of negative indicator of infant morality, the best is represented by the minimum and the worst by the maximum. For converting the
actual levels of a positive variable into normalised indicators, first the minimum values are subtracted from their respective actual values and
then, the gap so obtained is divided by the range (between the maximum and the minimum). In other words, for positive indicators:
Actual Value – Minimum Value

Achievement Level= –––––––––––––––––––––––––––––––
Maximum Value–Minimum Value
For the negative indicator of infant mortality, first the actual value has to be subtracted from the maximum value and then the gap has to be
divided by the range. In other words,
Maximum Value – Actual Value

Achievement Level=–––––––––––––––––––––––––––––––
Maximum Value–Minimum Value
Index Construction
There are, now, three such indicators. We may call them (i) Life Expectancy Indicator (LEI), (ii) Infant Mortality Indicator (IMI), and (iii) Basic
Literacy Indicator (BLI). These three indicators are averaged to give what is called the Physical Quality of Life Index (PQLI):
PQLI = (1/3) (LEI + IMI + BLI )
Choice of Minimum and Maximum Values

As in the case of life expectancy and infant mortality, there exist no natural minimum and maximum values, one has to choose reasonable
values. After a lot of considerations, which need not hold us, Morris chose the following set of values They may need revision in the light of
recent experience of countries. For example, maximum life expectancy could now be raised to 85 years. The conversions from values to
indices are linear. Put the actual values of the country in the expressions below and obtain the component indices as also the Physical Quality
of Life Index. The expressions are given below:
Actual Life Expectancy at Age 1 – 38
LEI = –––––––––––––––––––––––––––––––––––
39
229 – Actual Mortality Rate

IMI = ––––––––––––––––––––––––––––
220
Actual Literacy Rate – 0

BLI = –––––––––––––––––––––––
100
suppose for India, life expectancy at age one is 70 years, infant mortality rate is 70 per thousand live births and adult literates constitute to
be 55 per cent of adult population. Try step by step and you will find that LEI is 0.82, IMI is 0.72 and BLI is 0.55. The PQLI is, therefore,
about 0.70.
Human Development Index
Only ten years passed since the PQLI was developed, another index came into being. Since 1990, an agency of the United Nations, viz. the
United Nations Development Programme (UNDP) has been publishing every year a report called Human Development Report.
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This report, besides discussing various aspects of human development, has been ranking various countries according to the level of human
development index. Before the human development index is described, it would be an interesting idea to look at the GDP/GNP from a fresh
angle. It is pointed out that these measures are measures of activity and they concentrate on production of commodities -- goods and
services. We should, it is suggested, instead focus on capabilities and measure improvement in capabilities of people. Living long and healthy
life is a capability and so is to be able to read and write. With rising capabilities, we have wider choices and development is what if not
widening of choices! The idea has an added dimension that these capabilities cannot be accumulated. In a way it is close to PQLI except that
now the theoretical scaffolding is strong. But at the same time, a non-physical entity will enter in the making of index and it will create
problem for international comparison.
The Index
Human Development Index is broadly an average of social aggregates/averages of longevity, knowledge and access to resources. To put it
more concretely, it is an equi-weighted average of :
1. Life Expectancy Index (LEI)
2. Education Attainment Index (EAI)
3. Standard of Living Index (SLI)
where the sub-indices were to be calculated by the same old method of the PQLI. In other words,
HDI=(1/3)(LEI+EAI+SLI)
Components
Life expectancy here refers to life expectancy at birth, not at age one, because infant mortality is not entering this index as a separate
indicator. Educational attainment is literacy plus. To begin with, it was only adult literacy. Later on, it became a combination of adult literacy
rate and mean years of schooling. In highly developed countries, adult literacy was complete but education level was still rising. This could be
reflected through mean years of schooling or enrolment ratio. Now, mean years of schooling have been replaced by combined enrolment
ratio. The weight assigned to adult literacy rate (ALR) is 2/3 while that for combined enrolment ratio (CER) is 1/3. Therefore, educational
attainment index may be given as:
EAI = (2/3) ALR + (1/3) CER
Standard of living is represented here by a transformation of per capita income. Besides longevity and knowledge, it has been argued, there
are many things which people desire. It is difficult to capture them. For living a decent life, people need resources. Per capita national income
is the simplest measure of resources at the command of people. Since this exercise has basically been conducted for international
comparison, per capita incomes of different nations have per force to be brought to some common denominator. Per capita incomes are first
converted into purchasing power parity dollars (PPP$).
The second step concerns with the fact that the returns to a dollar of income is not the same throughout the whole range of income. The
increase in returns should diminish as income increases and should eventually become zero. This idea was handled by the UNDP in a variety
of ways. Presently, standard of living is being captured by the log-transform of per capita income (PCI) in PPP$. In other words,
Standard of living = log (PCI in PPP$)
You know very well that, at base 10, logarithms of 10, 100, 1000, and 10000 are 1, 2, 3, and 4 respectively. Thus, returns to additions in
income are diminishing as income goes on increasing. There could be many other ways to accomplish this feature. The UNDP has tried other
formulae in past but thought it proper to change to simple logarithm conversion.
Normalisation
Since we are using only positive indicators in this index, we can write only one formula for computing the component indices (CI):
Actual Value of the Component– Minimum Value of the Component

CI = –––––––––––––––––––––––––––––––––––––-------------------------------
Maximum Value of the Component– Minimum Value of the Component
where CI stands for LEI, ALRI, CERI and SLI. It may be noted that ALRI and CERI are just ALR and CER respectively, each divided by 100.
Minimum and Maximum Values
After a lot of debate over years and following the norms for various components, the UNDP has finally fixed the following minimum and
maximum values for various components ofHuman Development Index.
HDI and India
The United Nations Development Programme (UNDP) has been compiling humandevelopment indices for different countries for which it had
access to relevant data.
These indices are published in Human Development Report, brought out annually by the UNDP. We can notice that the data compilation takes
time. We can also notice Between the last two years, we find, India’s rank improved by 13 while number of countries dropped by 12. It is
quite possible that most of the countries excluded were above India. We should also notice that India’s rank improved by 2 from 123 in 1988
to 121 in 1990 while the HDI value actually fell. It is possible because of change in methodology and components used. Despite these
weaknesses, we can see that India’s HDI value is improving since 1990 when it recorded its lowest value. Fortunately, HDR 2001 has
calculated HDI values for differentcountries on uniform basis with same methodology by ensuring comparability across nations and over time,
at an interval of five years since We should notice that our HDI is improving since the mid-seventies. Perhaps we are improving on all fronts,
life expectancy (reflecting health to some extent), education (including literacy) and general standard of living (represented by per capita
income). The UNDP has been categorising various countries ascountries with high human development, with medium
human development and with low human development, depending upon whether a country had HDI value above 0.8, between 0.5 and 0.8 or
below 0.5. Prior to 2000, India was considered as low human developmentnation. In 2000, it has become a country with medium
human development.
It will not be out of place to inform that some scholars have done interstate comparison for India while some state governments have come
out with state-level exercises for humandevelopment index. These reports do contain more information on human development than are
available in compilation of HDI. Since March 2002, our Planning commission has also come out with a report known as National
Human Development Report.
Quality of Life Index
Some economists still feel that, though human development approach talks of many dimensions, the human development index encompasses
only very few of them, though important ones. They feel that political and civic dimensions, if not environmental ones, need to be
incorporated in any such exercise.
In one such contribution ‘On Measuring the Quality of Life’, Dasgupta and Weale have considered six parameters what they have called living
standards’ indicators or constituents of well-being. These are:
(i) per capita income in PPP$,
(ii) life expectancy at birth in years,
(iii) infant mortality rate in per thousand live births,
(iv) adult literacy rate in per cent of adult population,
(v) index of political rights in seven-point scale and
(vi) index of civil rights in seven-point scale.
We may note that civil rights are rights of individuals vis-a-vis the State, while political rights are citizens’ right to play a part in governance
of their country. Governance will mean who will govern and under what laws. While the first four could be called ‘socio-economic’ indicators,
the last two could be said to be ‘political and civil’ indicators.
These indicators are aggregated in a peculiar way. First, countries are ranked according to each of the indicators in ascending order from
worst to best. Second, the ranks for different indicators of country are added and thus for each country a rank-score is obtained.
Third,countries are again ranked according to their rank-scores.
Though, this work was done from late 1970s to early 1990s, using the data relating the results are interesting. Of 48 countries listed,
Mauritius comes the best and Sri Lanka, the second best. China and India come 10th and 12th best from the top, while Bangladesh and
Pakistan come 26th and 30th from the top. In both the pairs, scores in ‘socio-economic’ indicators are found to diverge from those in ‘political
and civil’ indicators. In ‘socio-economic’ indicators, China scores better than India, Pakistan and Bangladesh but in ‘Political and Civil’
indicators, India scores better than China, Bangladesh and Pakistan. Though the story is a bit old, it may hold even today.
Concluding Remarks
Intellectuals and policy-makers were not very happy with the use of GDP or its per capita variant as an indicator of welfare or development.
Some economists developed composite indices taking into consideration the distributional aspects. Others did try to modify the GDP by
adding the values of those things that were left out in the idea of GDP or subtracting the cost of the items that do not contribute to the
welfare. Some other scholars and agencies thought that they should directly measure the development, particularly social development. They
considered all possible variables that impinged upon modernisation, urbanisation and industrialisation. Most of the variables were all on the
side of inputs. They combined inputs with output. The result was not a happy one.
Morris developed what he called the Physical Quality of Life Index (PQLI). He thought that it represented the outcome of developments. He
was conscious of the fact that many psychological aspects, which are no way less important, were not covered in this index. He did not
deliberately cover the monetary aspects which pose problem for international comparison.
The PQLI had a great technical flaw. Infant mortality and life expectancy both referred to the same demographic ground. It was further found
that the concept did not include many other aims and objectives of life except longevity and knowledge. So came HDI, the
HumanDevelopment Index, which incorporated per capita income along with longevity and knowledge (redefined as educational attainment).
There are objections to incorporation of income in HDI on many counts. Yet, the UNDP considers it prudent to include it as proxy to the
uncovered aspects of well-being. Many scholars are not completely happy and have chosen to indicate an alternative. Parthasarthy Dasgupta
and Martin Weale suggested a way of combining some aspects of quality of life into an index, which is called Quality of Life Index.
Growth and Structural Change in the Indian Economy
Introduction
In this chapter you will study the growth of and structural change in the Indian economy in the last fifty years since 1950-51 for which data
on most of the macro aggregates are available on an annual basis.
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We shall concentrate on the growth of gross domestic product at factor cost valued at 1993-94 prices. We shall consider the growth of per
capita national income, also valued at 1993-94 prices, which can be taken as the simplest indicator of the level of living or development.
In an earlier chapter, one of the notions of development was posed in terms of structural change along with growth. What do we mean by
structure? Most people mean by it production structure, that is, composition of output produced by the economy. Some would like to find out
how and where our labour is absorbed. Other factors such as land and capital are not given equal importance. Some would also like to find
out how the production of output is divided between rural and urban areas of the country or between public and private sectors of the
economy or between organised and unorganised sectors. We shall discuss all of them. But we can appreciate developments since
Independence better once we have a little hint about the scene on the eve of Independence.
Economy on the eve of Independence
We had inherited an economy, which was basically geared to the interest of our colonial masters. The rate of growth of per capita income
during the hundredyear period before Independence, from whatever scanty information is available, was just 0.5 per cent per annum. It has
further been noted that there were long spells when the economy actually stagnated or declined.
In the past, we were known for producing fine cotton fabric, handicrafts and other merchandise. Even during the early British Raj, that is,
before the onset of industrial revolution in Britain, our economy was an industrial economy by the standards of those days whereas the
European economies had yet to usher in modern civilisation. Yet, by the time we got Independence, our economy was primarily reduced to an
agricultural economy and we used to export mainly raw materials and minerals for the British industries and even foodgrains while we might
have been hungry ourselves.
In 1950-51, our per capita income was no more than Rs 3,700 at 1993-94 prices (while in 1999-2000, it is a little more than Rs 10,000). The
contribution of agriculture sector (including animal husbandry and livestock) to the GDP was around 54 per cent by current prices and 50 per
cent by constant prices of 1993- 94. If we include forestry and logging and fishing in this sector, then the contribution turns out to be 57-58
per cent. And, if we add mining and quarrying and call the combined sector as primary sector, the contribution of primary sector is found to
be about 60 per cent. Manufacturing contributed only around 10 per cent. Contribution of the service sector was thus around 30 per cent.
Most of the people were engaged in agriculture—as cultivators on their own tiny holdings or as wage labourers on others’ fields.
Growth of GDP since 1950-51

Growth of an economy is reckoned with growth in its GDP at constant prices. We have now a complete series of gross domestic product at
1993-94 prices from 1950-51 onwards but we give here the GDP series at five yearly interval (see above table).
However, in order to give you a feel about the general tendency of rise and occasional decline in a few years in comparison to their respective
preceding years, we give here a graphical presentation of the whole series. We notice from the graph that there were occasional drops in the
GDP which we do not notice in the abridged Table presented here. But, generally it has been rising. Over the period of last fifty years, it has
increased more than eight times. But we are and should be more interested to know whether growth rate itself has risen over time.
We can also calculate rates of growth for different plan-periods or different decades or for periods divided by significant events. All such
breakups have been used by scholars. We shall calculate growth rate per annum by decades only. We shall use two popular methods of
calculation of annual rate of growth for long periods, viz. average annual growth andcompound annual growth rate.
We present below the rates of growth of GDP for each of the decades and for the half century gone by in the following table.

From Table, we notice that the rate of growth for the whole duration is conclusively more than 4 per cent per annum.

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The rate of growth got depressed in seventies but has definitely improved during the eighties and nineties. Presently, it can be safely
accepted that the rate of growth is close to six per cent per annum. Some credit can be given to the policies adopted in the eighties and
nineties on the growth front but credit should also be given to the base created during the fifties, sixties and seventies, which helped change
the productivity of the agricultural economy and diversification of the industrial economy of the country.
Growth of Per Capita Income
Per capita income is the ratio of net national product to the (mid-year) size of population. Net national product is likely to follow the pattern of
gross domestic product, as the component of net factor income from abroad is small in comparison to the total. Population has been secularly
rising in the last fifty years though, of late, the rate of growth of population has started declining. We can remember that, in the case of
population, we have only decennial figures and, therefore, can calculate only a single rate of growth of population. Using this technique,
population size for each mid-year is interpolated. Dividing net national product by the size of population, per capita income is calculated.
Annual per capita incomehas risen a little less than three times from a little less than Rs 3,700 in 1950-51 to over Rs10,000 in 2000-01, at
constant prices of 1993-94. In none of the years shown here, there is a decline over the year in the previous row. But, one can notice that
there is hardly any rise in 1965-66 over 1960-61, that is, after a gap of five years. Generally, there is some rise in normal years. It means
that 1965-66 was a particularly bad year. In fact, 1965-66 and 1966-67 were years of severe drought, though they gave us green revolution.
However, with a view to giving you an idea about the wider fluctuations in case of per capita income, we give here the graphical presentation.
Changes in Production Structure of the Economy
As an economy grows, its production structure changes. It moves from agriculture towards manufacturing and structure changes.
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It moves from agriculture towards manufacturing and services. It is understandable. You might have noticed that relatively well-off families
spend proportionately less on food items and more on manufactured items. You may also note in your family that, as income increases,
expenditure on items other than food increases more than proportionately. But, you should note that normally absolute amount of
expenditure does not, broadly speaking, decline; in fact, increases but less than proportionately. It implies that production structure should
shift away from agriculture. Moreover, many agricultural products, which used to directly reach the households, will now reach after some
processing and through long channel of distribution. Bread, noodles, sauces and juices are good examples. It means activities
ofmanufacturing and trade will increase. So, let us see how the production structure has changed.
We know that hundreds of thousands of activities are always in operation in any modern economy. Many activities emerge and some of them
die down; some of them even re-emerge, may be, in a modified form. But, it is difficult to discuss in terms of each single item. We often
aggregate them on the basis of similarity of products or nature of activities.
Our Central Statistical Organisation uses nine broad categories, called sectors. Six of them are further subdivided in two/three/four
subcategories. Industry as a sector does not occur in it; industry is accommodated in ‘mining (and quarrying), manufac-turing and electricity’.
In total, there are 18 categories, sectors and sub-sectors, in which total economic activity of the country is presented in the National Accounts
Statistics.
There are, however, two three-fold classifications in which economists discuss changes in production structure. One is agriculture,
manufacturing/ industry, and services and the other is primary, secondary and tertiary. Besides cultivation of crops, agriculture includes
livestock and animal husbandry. But forestry and logging and fishing are clubbed with agriculture to make a broad sector of ‘agriculture,
forestry and fishing’. If we add the sector of mining and quarrying to this sector, we can call it ‘primary sector’ as these activities are
associated with nature.
The manufacturing sector is further subdivided into registered and unregistered manufacturing, depending upon whether manufacturing units
are registered under Factories Act 1948. Industry may include manufacturing and mining and quarrying. On the other hand, if we club the
sectors of electricity, gas and water supply and construction with manufacturing, we can call it ‘secondary’ sector.
This is just a matter of convention. There may be differences between countries and within a country changes in classification may occur over
time. We did not have exactly the same classification always. While new products gain entry with each major revision of national accounts,
some swapping of activities is possible. For example, earlier LPG gas was included in the sector of electricity, gas and water supply, now it is
part of manufacturing. While we shall highlight some salient features of production structure or composition of output, it would be interesting
for you to do your own exercises and develop your own views on contributions of different sectors.
Absolute Contribution of Different Sectors
It is easy to see that agriculture production has been continuously on increase and has increased about fourfold. Since our Table does not
include all the years, we do not find any drop in agricultural production. There are many periods when agricultural production actually fell.
Whenever we notice a fall in the gross domestic product, a major reason is likely to be a fall in agricultural production as its contribution to
GDP had been substantial. We were most severely hit in agriculture in the consecutive years of 1965-66 and 1966-67. These years, however,
gave us green revolution. We are now quite comfortable with the overall performance of agriculture. Yet, we had had two-three years of
setback in each of the decade. We should remember that agriculture gives us food, milk and meat and gives to industry the raw material
needed particularly for consumer goods industries. Compared to agriculture, other sectors included in primary sectors are small; the
contribution of primary sector is found to have risen only four times.
Manufacturing which contributed about Rs 12,500 crore in 1950-51, contributed to the tune of Rs. 2,00,000 crore in 1999-2000, almost
sixteen-fold increase over the period. Annual construction activity also rose ten times. Construction does not mean only houses but also roads
and railway lines, dams, and canals, bridges and flyovers, etc. and also huts. Electricity, gas and water supply were in nascent stage in the
wee hours of Independence, contributing less than Rs 500 crore at 1993-94 prices. Its contribution rose 60 times in 50 years. Overall
contribution of the secondary sector rose fifteen-fold.
Trade along with hotel and restaurant business rose fourteen-fold over the period while transport along with storage and communication rose
eighteen-fold. Financial and business services including insurance and real estate also rose fifteen times while community, social and personal
services, including public administration and defence rose only eleven-fold. Thus, in the second half of the twentieth century while the
contribution of primary sector to GDP rose to four fold that of secondary and tertiary sectors rose by fifteen fold each.
Relative Contribution of Different Sectors
Relative contribution of a sector depends on its own performance as well as that of other sectors. As a result, despite positive contribution, a
sector may lose relative position. Thus, while agriculture contributed 50 per cent to the making of GDP in 1950-51, it contributes less than
25 per cent at the close of the century despite four-fold increase in its output. Thecontribution of primary sector came down from close to
60 per cent to less than 30 per centover the period.
The share of manufacturing in GDP has gradually risen from 9 per cent to 17 per cent over the period. The share of electricity, gas and water
supply, which was hardly one third of oneper cent rose to close to 2.5 per cent. The activity of construction, despite good rise in absolute
terms, is considered to be slackening; during the first twenty years, while the share rose from 4 per cent to 6 per cent, during the last thirty
years it fell back to 5 per cent. Secondary sector as a whole raised its contribution from about 14 per cent to more than 24per cent. The
secondary sector is closely contesting the primary sector as far as its contribution to the GDP is concerned. Let us look at the tertiary sector.
The share ofcontribution of activities of trade, hotel and restaurant business rose from 8-9 per cent to 14-15 per cent while that of transport,
storage and communication rose from 3.3 per cent to 7.3per cent over half the century. The contribution of financial and business services
increased from 6.7 per cent to 12.7 per cent while that of community and personal services increased from 9.4 to 13.4 per cent. It may be
noted that, among the sectors within tertiary sector, in 1950-51, the contribution of community and social services dominated the scene but
it gradually gave way to trade but in the nineties sector of financial and business services emerged as close contestant. However, it may be
pointed out that public administration and defence, which contributed to the tune of 3 per cent in 1950-51, are now contributing more than
6 per cent. Within the broad category of community and social services, the share of public administration and defence has risen from 1/3 to
1/2 over the period
Growth of Different Sectors
we can also derive a table giving us the rate of growth of different sectors. We have computed only compound annual growth rates (Table
3.7).
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We should take these rates with a pinch of salt as they crucially depend upon initial and final figures. Roughly speaking, agricultural situation
during sixties and seventies can be said to be bad as the rates of growth fell below that of population. Foodgrains dominate in
ouragriculture and we cannot afford to import it. Even if we import some agricultural produce, being a large country, we ought to produce
enough foodgrains ourselves. During the nineties, the growth of foodgrains production is somewhat slackening. So long as it does not create
bottleneck for raw material for industry and supply of foodgrains does not fall short of domestic demand, we can afford a little lower growth
rate in future. The rate of growth of primary sector has always been lower than that of secondary and tertiary sectors, which is a major
reason for decline in its share.
Manufacturing sector activity grew at twice the rate of agriculture. The seventies were bad for all sectors. Electricity, gas and water supply
accorded a very low rate of growth of 4 per cent per annum during the seventies. So was the case with construction. Secondary sector as a
whole did pretty well during the eighties, better than during the nineties.
The nineties belong to the tertiary sector, which grew at the rate of 7.8 per cent per annum. All service sectors are growing faster in the
nineties than they did in the eighties wherein performance was better than that in the seventies in terms of growth. There are, one can see, a
couple of exceptions to this observation.
The overall movement seems to be away from primary/agricultural complex to secondary and tertiary sectors. The drop in the share
of agriculture is shared between secondary and tertiary sectors; and as time passes the share of tertiary sectors is increasing faster than the
share of secondary sectors.
Changes by Other Segregations of Production
Three important divisions of activities are often discussed by scholars so far as productionstructure is concerned. One is the division regarding
location of activities, location being divided between rural and urban areas. The second is on the basis of ownership
of productionestablishments, division being made between public and private. The third one is about organised and unorganised sectors.
Division between Rural and Urban Areas
Agriculture is the industry of the country-side and manufacturing is the industry of the town, said Adam Smith, father of Economics. As a
habitation diversifies its economic activities, it changes its status from rural to urban at some point meeting certain definitional marks. In
India, in last fifty years, the number of towns has increased from 2800 to 3600 andpopulation living in them has increased from a little over 6
crore to 26 crore. The proportion of population living in urban habitation is now well over 25 per cent, which in 1950-51 used to be around 16
per cent. On the other hand, the number of villages is now about six lakh and a village may have more than one hamlet. The number of rural
habitations is over 10 lakh. Not only agricultural and pastoral activities are carried out in rural habitations, manufacturing (handicrafts), trade
(retail), transportation (bullock carts and tractors) are also part of rural activities and rural folk benefit from them.
We do not have regular annual series of production output of the activities according to rural-urban division. The CSO has made available
such a division for the years 1970-71, 1980-81 and 1993-94 but only at current prices and for net domestic product. With the help of these
figures, we gather some broad idea about the shift in activities. From the perusal of these statistics, one would notice that in 1970-71 only
62.5 per cent net domestic product was generated in the rural area where more than 80 per cent population resided (and worked) while in
the urban area population residing (and working) was less, 20 per cent, the net domestic product generated was 37.5 per cent.
Thus, per capita net domestic product in the urban area was 2.45 times that in the rural area. When we look at the data for 1993-94, we
gather that while population proportion in rural area has reduced by about 6.7 per cent points, its contribution to net domestic product has
reduced by 8.6 per cent points but just the reverse could be said to be the case with the urban area. But the loss of 6.7 points in 80.2 points
is not the same as gain of 6.7 points in 19.8 points. Therefore, net accretions to the two areas on per capita basis show that per capita net
domestic product in the urban area is 2.39 times that in the rural area. Though this ratio is not deteriorating over time, it is high enough to
make people move to urban areas even if unemployment rate is somewhat higher in urban areas.
Division between Public Sector and Private Sector
Ever since there has been the state, there has been public sector. But the presence of public sector in production, beyond public
administration and control, was
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very little before Independence. It has been increasing over time as we pursued a policy of state intervention in various sectors for variety of
reasons. There is not one broad sector of economic activities where public sector is altogether absent. We have firm data on contribution
of public sector in different production sectors since1960-61. A cursory look suggests that the importance of public sector had been on
increase with the passage of time in practically all sectors. The share of public sector, which was barely 9 per cent even in 1960-61, has
increased close to 27 per cent though of late the speed of rise has slackened.
Public administration is purely a public sector activity and in fishing, it has just shown its presence. In agriculture its presence has increased
but it predominantly seems to be irrigation as this activity is accounted for within the sector of agriculture. Its contribution in forestry and
logging sector is drastically reducing. Most of the mining activity is under public sector and it is now around 80 per cent. Even in the sector of
manufacturing its share has gradually increased from around 7 per cent in 1960-61 to around 20 per cent in 1998-99. The share in
construction activity has increased from less than 5 per cent in 1960-61 to almost 16 per cent in 1998-99.
It is in trade that public sector has withdrawn since 1980-81 when it participated to an extent of 8.5 per cent. Its role in transport has also
plummeted to some extent yet it plays a great role. The railways are completely with the Government of India. In road transport, state
corporations play a significant role at least in passenger transport. In financial sector too, the presence of public sector rose significantly; it
rose from 6.5 per cent in 1960-61 to 17 per cent thanks due to nationalisation of 14 major banks. A further dose of nationalisation in 1975-76
led to its further rise to 27 per cent by 1980-81. Even 6.5 per cent in 1960-61 should owe a great deal to the nationalisation of Imperial Bank
as the State Bank of India.
Division between Organised and Unorganised Sectors
Organised sector includes all public sector establishments and private sector establishments registered under one or the other act, such as
Company Act, Factory Act, Societies Act or Cooperative Act, etc. They are supposed to maintain accounts. Net domestic product was found
divided between organised sector and unorganised sector in 25:75 ratio in 1960-61. With passage of time, the proportion of organised sector
went on increasing, with some fluctuation, and reached around 30 per cent by 1980-81. Since then, its share has been rising and it is
expected to be around 40 per cent by the close of the century. Within organized sector, manufacturing accounts for 40 per cent and
community and personal services, 30 per cent while trade and finance may account for 25 per cent.
Industrial Structure of Employment
All able-bodied persons should work. Children should not be allowed to work. Old, sick and infirm should not be permitted to work. Even if
production is almost mechanised, there is a man behind the machine. People who are employed and people who employ as well as people
who are self-employed are all treated as workers. Their numerical strength is known as work force. People who are willing to work at the
prevailing wage rate but are not employed, are treated as unemployed. Despite the general feeling that a large number of people are
unemployed, the percentage of people who are unemployed is not very large. (However, in the composition of the unemployed, a large
number comes from the educated lot). The reason is that poor people cannot afford to be unemployed.
They work on somebody else’s farm, shop or factory or engage themselves in some or the other activity on their own account. We should,
however, remember that statistics used by us do not include people engaged in activities carried out in homes and hearths by the members of
the family/household. The proportion of people working in total population in our country is around 40 per cent. This proportion is higher in
the case of male members and those living in villages. There is a variety of ways in which employment data is presented. One classification is
sectoral (or industrial) and the other is occupational. They are made for each of basic four categories, viz., rural male, rural female, urban
male and urban female. Employment data is available from the census as well as the NSS. The census data for 2001 is not yet available in as
much detail as we need them in this chapter. We opt for the NSS data. However, comparable NSS data is available from 1972-73 only at an
interval of five years .
Concluding Remarks
In this chapter, first, we tried to have some idea about the economy in the initial years of our Independence and emphasised that the first
half of the twentieth century was bad in terms of growth as well as in terms of diversification of the economy.
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Then, we discussed the growth of GDP and PCI. We noticed that, over the span of fifty years, the growth rate of GDP was a little over 4 per
cent per annum. The rate of growth during the seventies was particularly low. During the eighties and nineties, we were able to grow at a
rate close to 6.0 per cent per annum. Per capita income grew at the rate of slightly more than 2 per cent per annum during the whole span of
fifty years. During the eighties and nineties, the rate was found to be more than 3.5 per cent per annum.
Then, in order to find out as to how the composition of GDP in terms of sectoral contribution was changing, we studied absolute contribution
and relative contribution of different sectors, as also growth rate of different sectors. We noticed that contribution of agriculture to GDP,
despite four-fold increase, reduced from 50 per cent in 1950-51 to less than 24 per cent in 1999- 2000. The contribution of primary sector
came down from 60 per cent to 27.5 per cent. The contribution of secondary sector increased from 13 per cent to about 25 per cent while
that of tertiary sector, from around 28 per cent to 48 per cent during the same period.
We also touched upon the contribution of rural sector vis-a-vis urban sector, public sector vis-a-vis private sector and organised sector vis-à-
vis unorganised sectors. Contribution of rural sector decreased from over 62 per cent in 1970-71 to about 54 per cent in 1993-94 while
population of the sector reduced from 80 per cent to 75 per cent. Contribution of public sector grew from less than 10 per cent in 1960-61 to
well over 25 per cent in 1998-99. Contribution of organised sector was about 25 per cent in 1960-61, which is expected to have risen to
around 40 per cent.
In the end, we discussed how labour is being absorbed in different sectors. The employment in agriculture has declined from three-fourths in
1972-73 to three-fifths in 1999-2000; the absolute number reduced for the first time in 1999-2000. Employment deceleration in primary
sector is evenly shared between secondary sector and tertiary sector.
Economic : Main – Paper I

(1) Advanced Microeconomic Theory - H. L. Ahuja
(2) Macroeconomics – M. L Jhingan
(3) Monetary Economics – M.L. Jhingan
(4) Public Finance - S. K. Singh ( S. Chand)
(5) International Economics – M. L. Jhingan
(6) Economics of growth & Dev. - M. L. Jhingan
Economic : Main – Paper – II
(1) Indian Economy Environment & Policy )
 I. C. Dhingra (2005 Ed.)
 Sultan Chand & Sons. (For Mains I & II)
(2) Modern Economics – 2005-06 - H. L. Ahuja

(3) Indian Economy since – 2005-06
 Independence - Uma Kapila
(4) Indian Economy

(5) Pratiyogita Darpan – Indian Economy
Economics Books for IAS Exam

 Dictionary of Economics - Ghaham Bannock; T.E. Baxter, Ray Rees (Penguin)
 Economics (Read Relevant Chapters) - Paul A. Samuelson
 The Hindu: Survey of Agriculture & Survey of Industry
 An Introduction to Economics - A.W. Stonier and D.C. Hauge
 Monetary Theory and Public Policy - Kenneth Kurihara
 Economic Survey : Eighth Five Year Plan: New Industrial Policy - Government of India
 Outline of Monetary Economics (Read Relevant Chapters) - A.C.I. Day
 Public Finance - H.L. Bhatia
 Modern Banking (Read Relevant Chapters) - R.S. Sayers
 Indian Economy - Mishra and Puri
 Macro Economic Analysis - Edward Shepiro
 Indian Economy - R. Dutt and KPM Sundaram
 Money Supply in India: Concepts, Compilation and Analysis (Sec.1-3 New Series only):
Functions and Working (Read Relevant Chapters) - Reserve Bank of India
 Economic Growth and Development - Mayer and Baldwin
 Public Finance - K.K. Andley and Sundharam
 International Economics - Bo Soderston
 National Income Accounting - Bakerman
 Economics Choice - Koutsweanik
 Banking - S.B. Gupta
 International Trade - Bo Soderston
 The Economic Times and Economical and Political Weekly.
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25 UTI Capital Market Training Institute (Any Course) 2

B.A. (Pass) - Economics Concepts and Methods

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B.A. (Pass) - Economics Concepts and Methods

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B.A.

Economics Concepts and methods

1. Ashok Bapna (ed): Industrial Potential of Rajasthan

Micro Economic Theory

Application of Mathematics in Economics

Macro Economic Theory

QUANTITATIVE METHODS FOR ECONOMICS

INDIAN ECONOMIC THINKERS

Paper 1 : Micro Economic Theory

Books for Reference :

4. Richard A Bilas :Vyashti Arthastra. McGraw Hill Books Company, Tokyo.

Paper-II : Mathematical Methods for Economics

Paper III : History of Economic Thought

1. Alexander Gray, Development of Economic Doctrine.

PaperIV : Economy of Rajasthan

1. L.N Nathuramka, Economy of Rajasthan, College Book House, Jaipur.

4. Directorate of Ecomomics and Statistics, Govt. Of Rajasthan,State Income of Rajasthan.

Paper V : Macro Economic Theory

Paper VI : Indian Economy

Paper VII : International Economics

Paper VIII : Statistical Methods of Economics

Paper IX : Public Finance

Paper X : Development Economics

Paper XI : Money and Financial System

Paper XII : Mathematical Economics

COMPULSORY PAPERS FOR PREVIOUS

Theory of Consumer Behaviour-Cardinal and ordinal utility approaches.Derivation or Individual Demand

PAPER-II:MACRO ECONOMIC THEORY

Basic Concepts & Methodology.Macro Economic variables(e.g., national

Macro economic equilibrium-relative roles of monetary and fiscal policies.IS-LM analysis.Fleming-Mundell

PAPER-III QUANTITATIVE METHODS FOR ECONOMICS

Measures of Central Tendency Mean,Median,Mode Geometric Mean and Harmonic Mean.

COMPULSORY PAPERS FOR FINAL

The Law of comparative Advantage-The Mercentalists.

Free Trade versus protection.Tariff(partial Effects.Optimum Tariff).Other Trade Restrictions (Quota,Quota

Foreign Exchange Market:functions,Foreign Exchange risks,hedging,speculation,arbitrage,future and options.

Development Planning:Balanced and unbalance stategies,Choice of techniques.Capital-output ratio,Investment

Financing of economic development.Domestic and external resources.International trade and development

Factors of production.Characterstics of factor markets.Inter-linkages between land,labour and capital

PAPER(II):CO-OPERATION (THEORY AND PRACTICE)

Fundamental principles of cooperation-Traditional and reformulated once,state policy and cooperative

Cooperative Management:Role of cooperative department electec non-officials and cadres of cooperative

Location of Industries.Theories and measures of location.Location of Industries in India.Industrial

Industrial growth in India.Inter-regional variations in industrial development.Industrial policy in India.Small

Duration:3 Hours Max.Marks:100

PAPER (V):LABOUR AND INDUSTRIAL RELATIONS

Duration:3 Hours Max.Marks:100

Labour Economics-Importance,old and new theories.Theoretical and institutional labour Economics.Theory of

Basic principles of measurement of population growth-Estimates,census,vital registers and recortds of

Theories of demographic transition.Employment and manpower planning-Its significance and

PAPER(VII):ADVANCED INDIAN ECONOMY

Demographic aspects-Population growth, labour force, occupational distribution, poverty,unemployment. Issues

Paper (VIII): INDIAN BANKING SYSTEM

PAPER (IX):INTERNATIONAL FINANCE

PAPER (X): HISTORY OF ECONOMIC THOUGHT

PAPER (XI): MATHEMATICAL ECONOMICS

Duration : 3 Hours Max.Marks: 100

Theory of Consumer Bohaviour - Concavity of a Utility Function Convexity of an indifference curve.

PAPER (XII): ECONOMETRICS

Violation of basic assumption-Autocorrelation,multicollinearly. heteroskedasticity and specification error. D-W

PAPER (XIII): SURVEY METHODS

ECONOMIC GROWTH AND DEVELOPMENT

Per Capita Income