The Importance of Economy Questions in the IAS Exam
The Indian Administrative Service (IAS) is regarded as one of the most prestigious and sought-after public service positions in India. Aspirants with a desire to serve their country take the IAS exam to prove their mettle. The exam consists of three stages- Preliminary, Mains, and the Personality Test. The IAS Mains Exam has nine papers, including the Economy paper. The Economy paper is considered vital for the aspirant’s selection in the final merit list. Therefore, as an IAS aspirant, one needs to be thorough with Economy-based questions.
Here are the top five Erudition-based IAS Economy questions that you should be prepared for:
1. Explain the concept of Fiscal Policy?
Fiscal policy refers to the government’s use of taxation, public spending, and borrowing to influence the economy’s behavior. The government implements the Fiscal policy to achieve macroeconomic stability, economic growth, and social welfare objectives. The two main instruments of Fiscal policy are- taxes (direct and indirect taxes) and spending (capital and revenue).
2. What is the Significance of the Balance of payments?
The balance of payments table maintains the financial record of a country’s transactions with the rest of the world. It records the money earned by the country (through exports) and the money spent by the country (through imports). A country with a healthy balance of payments surplus has a better future projection than the deficit balance of payments.
3. Discuss the measures to combat inflation in the Indian Economy?
Inflation is a situation where the general price level increases significantly, leading to a decline in the purchasing power of the currency. The Indian economy has undergone inflationary pressure several times in the past decade. Therefore, the government takes several measures to curb inflation. Some of the crucial measures include increasing the bank reserve ratio, changing the interest rates, and fiscal measures such as reducing government spending.
4. What is the significance of the manufacturing sector in the Indian Economy?
The manufacturing sector plays an essential role in any country’s economic growth. The manufacturing sector’s growth leads to industrialization, more employment opportunities, and revenue generation. The Indian government has undertaken several initiatives to promote the manufacturing sector’s growth, such as the Make in India campaign and infrastructure development.
5. Discuss the issues and challenges faced by the Indian Banking System?
The Indian Banking system is facing several challenges in the present time. Some of the significant challenges include non-performing assets (NPAs), money laundering, and cybersecurity threats. The government is taking measures to restructure the banking sector through measures such as merger and consolidation.
In conclusion, as an IAS aspirant, it is essential to prepare for Economy-based questions thoroughly. The IAS Exam tests an aspirant’s knowledge in various fields, and economic knowledge is an important aspect of the exam. The above mentioned top five Erudition-based IAS Economy questions will help the aspirants prepare better for the exam. Having strong economic knowledge is not only crucial for the public service exam, but it also helps in the decision-making process in the future as an administrator.
