APPSC Group-1 Paper 3 study material

Introduction to Indian Economy

It is a popular belief that Economics only deals with money. What we are going to learn in the next few days is that – the popular belief is false. Economics is about making choices in the presence of scarcity. Take a small example, you have 10,000 rupees in your hand right now. You have a long list of expenditures ahead of you, like buying Tata McGraw Hill General Studies Manual, paying your Internet Bill, phone Bill, Electricity Bill, Current Bill, Cable Bill etc. Then you also realise that this is the festival season and many good clothes will be offered at a discounted price. Suddenly your mobile phone drops dead. What I am trying to say is you have limited (financial) resources with you but a long list of demands. We all face this sort of a situation on a daily basis. It is all about making choices. The same can be applied to marriages. (No offense meant !) The traditional practice in our culture is to look for a few matches and then make the right choice.

The study of making such choices and the problems arising out of scarcity – at the individual, national and international level is Economics.

The study of Economics is broadly divided into 2 categories,

1. Microeconomics and


2. Macroeconomics

In microeconomics, we study the individual household, or an individual firm. For example, if you study the choices of a single household in a village of Nalgonda district, it is microeconomics. When we study the resources and choices of all the house holds in Nalgonda district, it becomes Macroeconomics.

You might have observed by now that Macroeconomics is a rather relative term. It can be used to denote the study of economy of a district, a state or a country. In short, macroeconomics studies the aggregates of an economic system.

Keep in mind that for our course we will be dealing only with Economy and not Economics per se. The study of Economics includes a lot of theories and accounting which we have the liberty to skip. The economic state of Inida (and A.P.) how, we have been making choices to utilise our scarce resources (at the national and state levels) constitutes Economy.

A few of the major heads under Economy which we will be discussing in the coming days are,

• Budget


• Public Expenditure


• Taxes


• National Income


• Per Capita Income


• Gross Domestic Product, Gross National Product etc


• Unemployment


• Poverty


• Planning – Five Year Plans


• Money, Banking and Insurance


• Demand and Supply


• Foreign Exchange


• Balance of payments


• Public Debt


• Factors of production – land, labour, capital – and problems arising from their scarcity


• Land Reforms


• Growth and Development


• Inequalities


• The 3 Sectors of Economy – Agriculture, Industry and Services


• Government initiatives (Programmes) to address social and Economic problems

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Source : Govt. Jobs Material