1. Economic survey volume 1: overview of chapters
  2. Economic survey volume 2: overview of chapters
  3. Relevance of Studying the Survey?
  4. Mock Question for Mains-GSM3

Economic survey volume 1: overview of chapters

In the previous article, we learned:

  • What is meaning of economic survey?
  • Who prepares it?
  • How do they collect data and content for the survey? What is the structure of volumes?
  • what was the rationale behind chosing pink colored cover… all the way upto a brief gist of Vol1 chapter

Why Pink cover, What is important in the Preface & Listicles?

1) State of the Economy: An Analytical Overview and Outlook

Economic survey volume 1 chapters

2) A New, Exciting Bird’s-Eye View of the Indian Economy through GST

  • Post-GST: No. of registered tax payers increased for both direct and indirect taxes. [Because merchants register for GST (indirect tax), to avail input tax credit, but each month they’ve to file return on GSTN portal, so indirectly the (direct tax) officials could know their volume of transactions. Hence merchants have no option but to file Income tax return as well, lest they get a “RAID” by Ajay Devgan.]
  • Using EPFO data, we thought 31% workers outside agriculture, but from GST data it seems 53% workers outside agriculture.
  • Exporter states have better standard of living, and Indian exports “Egalitarian”, MSME share is significant compared to Top1%-Mukesh-Ambani type elements, unlike Brazil. (Same thing repeated in LISTICLE#3 and 4)
  • Critiques were afraid that the ‘producer states’, will earn less in GST system compared to the erstwhile “Excise-VAT” system, but no injustice has happened to States in GST.

Exam-Relevance? – Prelims: BES18/2:Taxation; BES18/4:Sectors | Labour – Mains-GSM2: Fiscal federalism, although “How GST helps in removing cascading effect and provides common national market”, is already asked in Mains-2017 question paper. – Mains-GSM3: Indian economy, government budgeting.

3) Investment & Saving Slowdowns & Recoveries: Cross country insights for India

  • After the sub-prime crisis and global financial crisis of 2000s, India’s savings and investment rates began to fall. Some nations take even 17 years to recover from such disaster.
  • For mobilizing saving into financial instruments, Government launched: Rajiv Gandhi Equity savings scheme, Gold schemes; later Modi Government launched PMJDY, Atal Pension Yojana, PM Jivan Jyoti and Suraksha Bima Yojana, Differential banks, demonetization, drive against black money etc.
  • For mobilizing Investment: FDI rules were relaxed, focus on Ease of Doing Biz, new Companies Act, single window clearance, reforms in factory-labour laws, Startup India stand up India and so forth.
  • But, IF we want 8-10% GDP growth rate, we’ll have to focus more on improving the investment rate than improving the savings rate.


  • Chapter is verbose, too much theoretical concepts and cross-country comparisons. Still,
  • Prelims: BES18/1: Fin.markets; BES18/4: GDP.
  • Mains-GSM3: Investment models- although directly nothing much but points can be used to ‘introduce’ or ‘conclude’ the things.

4) Reconciling Fiscal Federalism and Accountability: A Low Equilibrium Trap?

In this chapter, Arvind S. has done “Chetan-Bhagat-giri” i.e. repeating the same plot in new novel from his old novels. Here too, Arvind S. repeats the same concepts he had been saying in last three years such as:

  • In Advanced Economies, Government’s Direct tax collection is higher than Indirect taxes; nearly all of their voters are tax-payers, hence public utility services are better. But we’re largely a tax-non-compliant society, our fiscal capacity is poor and so are our public utility services.
  • Compared to Brazil and Germany, our State governments, PRI & ULBs not collecting adequate taxes on their own.
  • Since T2 (state) & T3 (local bodies) have poor fiscal-resources, they rely more on Finance Commissions’ tax-devolution from Union’s revenue. Here, the Special category states got truckload of money since independence yet their poverty rates, infrastructure not improved due to poor governance and lack of accountability.
  • Hence the title: Fiscal federalism = Accountability? No, we seem to have a low equilibrium i.e. राजकोषीय संघवाद के नाम पे केंद्र सरकार राज्यों को अपने राजस्व में से पैसा तो देती है, किन्तु सामने राज्यों की जवाबदेही अपेक्षा कम है की उन पैसो से को दो पैसे का भी काम ठीक से किया की नही?
  • Union’s fiscal deficit could aggravate before general elections 2019 if Modi launches populist schemes or increases budgetary outlay of existing schemes to woo the voters, particularly rural voters like he did in Budget-2018.

5) Is there a “Late Converger Stall” in Economic Develop?

  • Concept: “economic convergence”: poorer countries have grown faster than advanced economies (AE), and consequently, these poorer countries reduced the gap in standards of living between rich vs poor, mainly because they shifted workforce from agriculture to mfg/services sector e.g. Japan and S.Korea.
  • Since 80s, India began to growth, but we have not been able to improve std of living like Japan and S.Korea, because we couldn’t shift labour from agro to manufacturing/service in great numbers.
  • Now with “Make In India” and “Skill India”, we are trying to make this “shift” happen, but 4 challenges:
  • Anti-globalization: so, even if “Make in India” results into great production, USA/EU will impose higher duties, we can’t export much and earn much.
  • Pre-mature deindustrialization: ordinarily, countries grow from agriculture -> mfg -> services; but India jumped directly from agri -> services during Post-LPG reforms, because the poor quality of roads, electricity and outdated factory-labour laws prevented the growth of manufacturing sector. So, Unlike those Asian giants, We don’t have a robust manufacturing sector to absorb those agricultural labourers.
  • HR-challenges: More than 75% of class2 kids can’t read a single word from their textbooks, and even 50% of class5 students can’t read class2 textbooks. Youth has degrees but no ‘vocational skills’. Difficult to employ them.
  • Agriculture productivity is poor, and climate change is hurting it. IF agriculture-labour shifted elsewhere, there would be shortage of food.
  • Hence the title “we are “late”, these four challenges will ‘stall’ the convergence (between rich vs poor).


  • Verbose chapter. Many pages spent on gravity models and data analytics to prove the concept. Exam-worthyness is limited.
  • Prelims: BES18/ 4: Sectors (Labor, GDP) | BES18 /6: HDI
  • Mains: GSM2 (Policies for various sectors) & 3 (Growth, development and employment)

6) Climate, Climate Change, and Agriculture

Another Verbose chapter. Total 3 out 20 pages spent in giving bibliography. And in the remaining 17 chapters, same ideas repeated thrice in introduction, body, conclusion viz.

  1. With higher temperature and shorter rainfall: farmers will see income fall: 15-18% (irrigated farms), 20-25% (unirrigated farms).
  2. In this context, if we want to double farmers’ income by 2022, then we’ve to “cultivate more from less”- per drop more crop through Micro-irrigation, Replace power subsidy with DBT, Provide crop insurance by PMFBY and so on. [which is Basically the same thing that Arvind S. has been saying since last three years’ surveys]
  3. Just like GST’s success, cooperative Federalism necessary for Agro-success, because APMC and Land fall under states’ list.
  4. People need to be moved out of farms and villages- Both Sir Arthur Lewis and Dr. Ambedkar have said that in context of economic development and social development respectively.


  • Prelims: BES18-4: “Sector: Agriculture”
  • Mains-GSM1: Indian geography.
  • Mains-GSM3: Indian agriculture, environmental Pollution and degradation.

7) Gender & Son Meta-Preference: Is Development Itself an Antidote?

  • Economic Development is not an antidote because per-capita income and GSDP wise Punjab is better than North Eastern states YET Punjab’s gender indices (sex ratio, violence against women) etc. are pathetic.
  • Improving Women’s labour force participation rate (LFPR) is beneficial for her family and economy, but many challenges in this.
  • Son meta preference i.e. if daughter is born, the couple will continue to produce children until they’ve a boy. We’ve 21 million “unwanted girls”, most of them are neglected in food & education.
  • Sex selective abortion and neglect of girl child: 63 million missing women because these girls die before reaching adulthood.
  • Arvind S. mentioned notable steps by the Modi-government, though not measured their success (unlike he has been doing for GST and demonetization) but then again, aversion against girl-child is a complex social problem, no government can solve it with a simple scheme in a span of five years.


  • Prelims: BES18-6 “HDI”
  • Mains-GSM1: Role of women, population and associated issues
  • Mains-GSM2: Welfare schemes for the vulnerable sections of the population

8) Transforming Science and Technology in India

  • Arvind S. enumerates India’s achievements in S&T, How does this help in industrial growth and economic development? but laments that we are underspending on R&D, Patent delays due to inspectors’ shortage, Basic research neglected.
  • Arvind S. also laments that there is brain-drain because in the name of egalitarianism we are promoting mediocracy (yaani ki indirectly is he suggesting there should not be reservation in scientist posts?)

More relevant for Essays, GSM3 (Indigenization of technology, Achievements of Indians in science technology) and Interviews. Very little content relevant for Prelims. Yes, he mentions about ISRO’s achievement, Ancient mathematicians etc. but those topics you had to prepare for prelims S&T, even if he hadnot mentioned!

9) Ease of Doing Business’ Next Frontier: Timely Justice

  • In World Bank’s Ease of Doing Business Report-2018, our rank #100, which is 30 ranks improvement than last year, but “contract enforcement” India is even poorer than Pakistan. So, all is not well.
  • Arvind S. then gave statistics related to case-pendency, judges shortage & reforms.
  • Just like cooperative federalism, we need cooperative separation of powers between executive & judiciary- They should not encroach in each-others’ domain e.g. Government wanting to enter in Judges’ selection process through “NJAC” while Court making national anthem compulsory in Cinema-halls.

This chapter is also more relevant for Essays, GSM2 and Interviews compared to Prelims-MCQs.

Economic survey volume 2: overview of chapters

  • We know that Economic surveys first volume deals with the predictions and prescriptions for the future year. So far we are done with the preface, listicles and all the nine chapters given in the first volume of the latest economic survey 2017-18, which was published in January 2018.
  • The second volume contains the descriptions of the past years’ economic developments.

V2ch1) An overview of India’s economic performance in 2017 – 18

Positive overview about 2017-18

  • 6.5-6.75% growth rate projected; [because Survey was published in January 2018, Whereas the financial year will end on 31 March 2018, so Arvind S. can only make ‘projection’, he can’t give final GDP figure yet. वैसे भी वो आंकड़ा तो आधिकारिक रूप से CSO ने ही देना है.]
  • Forex reserve: Rs. 409 cr. Moderate level of inflation, CAD, Fiscal Deficit.
  • IIP improved. Per capita income also improved: 1,11,782 Rupees (Current price) | 86,660/- @constant (2011).
  • World Bank Ease of Doing biz 2018: Ranking also improved From 130 to 100.
  • Moody’s investment Rating also improved from BAA3 to BAA2.
  • Global Innovation Index 2017 Rank improved 66 to 60.

Negative overview About 2017-18

  • 2016 vs 2017: while most of the sectors recorded positive growth, but Agro fell from ~5% to 2.1% annual growth rate.
  • NHB’s RESIDEX index for house-prices inflation: it seems that real estate prices have increased the majority of the cities, despite demonetization. [“विमुद्रिकरण के पश्च्यात बिल्डरों की हेकड़ी निकल जायेगी और मकान सस्ते हो जाएंगे”, ऐसा नही हुआ है.]
  • Apart from this, India ranking fell in IFPRI’s Global Hunger report 2017, World Economic Forum’s Global Gender Gap Index 2017 etc. But Arvind S. didnot mention these negative developments [not out of ignorance but perhaps out of fear that Opposition MPs will raise an issue, afterall, the economic survey tabled in the Parliament, even though there is no constitutional compulsion for it! Or may be Arvind S. wanted to highlight those negative figures, but Finance Secretary or Finance Minister deleted those paragraphs!?]
  • Homework: Refer to the Table 0.1: Key indicators given in this chapter. What is the utility?
  • Sometimes in competitive exams they will ask absolute figures or overall trends in last three years from this table.
  • If you are opting to write the mains examination in Hindi, Gujarati or Marathi, refer to this table in Hindi-PDF To get the appropriate terminology e.g. Index of industrial production = औधोगिक उत्पादन सूचकांक.

(Mock MCQ from Table 0.1 in Vol2ch1) Which of the following indicators have been showing steady increase each year for the last five years for India?

  1. Production of food grains
  2. index of industrial production
  3. foreign exchange reserves
  4. WPI inflation.

Hint: I can’t give hint, because it is home work! Refer to the table.

V2ch2 to 10: What do they contain?

  • For the vol1, I have given you the gist of each and every chapter.
  • But for second volume, individual chapters contain statistical information about various sectors. As such for UPSC, the statistical figures themselves are not important but rather the trends and interpretations of those figures are important.
  • Very few figures you’ve to memorize for quoting in Mains / Interview e.g. food subsidy bill, % of people below poverty line, Fiscal deficit etc.
  • Hence, we’ll learn the important figures and trends in appropriate pillars (Banking, Budget etc.)
  • Here i’ll only give an overview of what individual chapter contains?


Ch Content Relevance pillar
2 Review of Fiscal Developments.

  • Tax collection figures and GST related developments.
Budget (2)
3 Monetary Management and Financial Intermediation

  • Review of the bi-monthly monetary policy of last one year. Measures of money supply, and how demonetization affected them.
  • Insolvency & Bankruptcy code progress, NPA figures.
  • NBFC & Insurance sector – although nothing in this subtopic significant except the usual definition of insurance penetration and insurance density.
Banking finance (1)
4 Inflation

  • Statewise, component wise inflation and Government measures to combat inflation.
Sectors of Economy (4)
5 Sustainable Development, Energy and Climate Change

  • Government schemes for SDG & climate change.
Infrastructure (5)
6 External Sector

  • DATA about India’s BoP, Forex reserve, Exchange rate, External debt.
  • Government initiatives for boosting exports.
BoP (3)
7 Agriculture and Food Management

  • DATA: Agriculture’s contribution in GDP, Employment, Exports. Production of various crops, and challenges faced by farmers.
Sectors of Economy (4)
8 Industry & Infrastructure

  • DATA on IIP, MSME, Infrastructure and energy production.
  • Govt schemes & Policies.
4 & 5
9 Service sector

  • DATA: service sector’s contribution in GDP, Employment, Exports, FDI.
  • Challenges & Government initiatives.
  • As such rarely any question comes from this chapter, but it provides fodder about IT-BPO industry, and India’s tourism potential for the interviews.
Sectors of Economy (4), but not much for prelims.
10 Social Infrastructure, Employment and Human Development

  • Figures related to health, education, labour for Non-UPSC exams and interview
  • For UPSC, schemes – their salient features, funding pattern & parent ministry are important. Figures are not that much important.
HDI (6)
Annex: Statistical Appendix

  • UPSC sometimes asks “Ascending descending trends” type MCQs from here. (scroll down in article to see)
  • Provides Handy data about your state for interview. e.g. Gujarat’s life expectancy, unemployment rate, teacher: student ratio.
All but poor cost : benefit


Relevance of Studying the Survey? [परीक्षामें सवाल निकलते भी है की नही?]

To answer this question, let’s go back to last year.

31st January 2017:
  • Economic survey volume 1 (2016-17) was published
  • Already given its gist in first lecture of BES17 Playlist
  • Vol2 was delayed because Arvind S. needed more time to finish data compilation on demonetization and its impact on GDP.
18th June 2017:
  • UPSC prelim exam was conducted.
11th Jingping August 2017:
  • Economic survey volume 2 (2016-17) was published.
  • I was thinking about doing its lecture series but upon reading the survey, realised it had very few prelim and mains worthy topics, which I released in the form of articles: “Social cost of coal”, “Transparencyof Rules Acts (TORA)”, “Trade in Services (TISA)”, “Risks toAgri” etc.
  • Out of that year’s survey vol2, one direct question came in GSM1: “In spite of adverse environmental impact, coal mining is still inevitable for development. Discuss.” (Social cost of coal). Apart from that survey (vol1 & 2), as “fodder” had been helpful in many other questions related to industrial development, inclusive growth and farmers’ issue in GSM3.

Now for a moment, let’s believe that both volume 1 and volume 2 of Economic survey 2016-17 had been published before the prelims – 2017. Then how many MCQ could be solved directly from there?

First MCQ in Prelims-2017

Q. ‘Scheme for Sustainable Structuring of Stressed Assets (S4A)’ is related to:

  1. Procedure for ecological costs of developmental schemes
  2. Scheme of RBI for reworking the financial structure of big corporates with genuine difficulties.
  3. Disinvestment plan for Central Public Sector Undertakings.
  4. Provision in ‘The Insolvency and Bankruptcy Code’

Answer Verbatim given in ES17 Vol1 page 103. It’s a scheme of RBI for corporates with loan-repayment difficulties.

Second MCQ in Prelims-2017

Q. ‘Broad-based Trade and Investment Agreement (BTIA)’ is between India and

  1. European Union
  2. Gulf Cooperation Council
  3. Organization for Economic Cooperation and Development
  4. Shanghai Cooperation Organization

Answer Verbatim given in ES17 Vol2 page 154. BTIA talks going on between India and European Union.

Third MCQ in Prelims-2017

Q. Correct about India after its liberalization of economic policies in 1991?

  1. Agriculture share in GDP increased enormously.
  2. India’s exports share in world trade increased.
  3. FDI inflows increased.
  4. India’s foreign exchange reserves increased enormously.

Select the correct answer

  1. 1 and 4 only
  2. 2, 3 and 4 only
  3. 2 and 3 only
  4. 1, 2, 3 and 4

Although this can be solved even without reading survey, if your fundamentals are strong. Otherwise, by referring to individual chapters on BoP and agriculture and glancing over the statistical-appendix you’d realize that Post-1991, Agro share in GDP has been falling, as service sector began to grow. Export-share and FDI increased. And India’s forex reserve increased from ~24,000 crores in 1991 to ~24 lakh crores in 2016- So that qualifies as an enormous increase in Forex. Accordingly, first statement is wrong and fourth statement is right, there is only option “B” Which fits this combination.

Fourth MCQ in Prelims-2017

Find correct statement (s):

  1. Tax revenue as a percent of GDP of India has steadily increased in the last decade.
  2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.

Answer choices

  1. Only 1
  2. Only 2
  3. Both 1 and 2
  4. Neither 1 nor 2

In the statistical appendix of ES17 Vol2 Page A56 we can see that during 2008-09 to 2016-17 (last nine years)

  • Tax : GDP has been would show a zigzag line, so First statement is wrong, it is not steadily increasing.
  • Fiscal deficit : GDP has been falling continuously except for 2009-10. so, second statement is also wrong, it is not steadily increasing.

Economic survey 2016–17 cost:benefit for the prelims 2017?

  • We are doing this analysis with presumption that “what if” both volumes were released before the prelims-2017,
  • Then vol1 (335 pages) + vol2 (458 pages) = nearly 800 pages worth reading would have translated to 4 petty MCQs? No, all ~800 pages given the economic survey 2016-17 were not important for the exam. If you were to prepare exam-oriented notes out of that survey, it’d not be more than 20 pages, because all figures, tables, data analysis are not relevant for UPSC.
  • Even if we ignore the third and fourth MCQs because they were from statistical appendix and no candidate goes through the pain of preparing statistical appendix, still 2 MCQs: (1) S4A = RBI and (2) BTIA = EU could be solved directly from a 20 pages note, Which is a pretty decent “per page cost : benefit”- that can be rivalled only by a few books such as M.Laxmikanth’s Polity Book, ShankarIAS’s environment book, NCERT physical geography class XI and IYB Ch.12 on Environment.
  • In UPSC mains exam, sometimes topics are asked with a lag of one to three years – This is true especially for contemporary economic issues.
  • Moral of the story: Do not ignore the economic survey for prelims or mains.
  • And For mains, when time permits, go through last four years’ economic surveys’ Introductions and conclusions for each chapter.

Mock Question for Mains-GSM3

Q. “Though its recommendations are not binding on the government, Economic survey is an important document for dissemination of data & discussion of new ideas for Indian Economy.” Elaborate (250 words)
“यधपि इसकी सिफारिशे सरकार पर बाध्यकारी नही है, किन्तु भारतीय अर्थव्यवस्था के डाटा-प्रसार व् नवीन-विचारो पर चर्चा के लिए आर्थिक सर्वेक्षण एक महत्वपूर्ण दस्तावेज है.”- विस्तृत करे. (250 words)
Exam-Relevance: GSM3- Indian economy – issues related to planning, mobilisation of resources, growth, development and employment; Government budgeting.
Model Answer? In the next article.

What after that?

  • Then we’ll start with the First pillar of economy that is money banking finance and insurance. Although, pretty much entire history, evolution and theory of those topics I’ve already taught in the video number 1 to 35 of the BES17 playlist last year.
  • So you should self-study them. I will only update that ‘knowledgebase’ with the new developments in BES18 article series like “Crypto currencies are not legal tenders”, “Bimonthly for monetary policies during 2017-18”, “PNB Scam, SWIFT Messaging system, letter of undertaking”, “FDRI Bill” and so on.

VISIT Mrunal.org/ECONOMY, for more.