CDS Economics · Free notes
National Income and Development: CDS Economics
National Income, Growth and Development Indicators has 79 past-year questions in CDS General Knowledge, from 2016 (II) to 2026 (II), and 32 of them are HARD. It is growing: 24 of the 79 come from the papers of 2024 to 2026, and the two papers of 2026 set ten between them. Two kinds of question share the chapter. The concept items ask what a measure includes, who proposed an idea or which curve plots what, and a short chain of definitions answers them. The report items quote an index, a survey or a rank, and those figures change, so every rank and figure here carries the year it holds for.
The handout has every subtopic, worked example, formula and trap with answers shown. The formula sheet is the chapter’s formulas and traps alone, on one page.
Subtopic notes
National Income Measures
13 PYQsHow GDP becomes GNP, NNP and national income, real against nominal GDP and the deflator, who measures it in India, and how the sectors share the output.
Macroeconomic Theory
14 PYQsThe classical and Keynesian views of employment, the later ideas CDS names with their authors, and the economic curves and what each one plots.
Employment and Unemployment
8 PYQsThe kinds of unemployment, the three labour rates of the Periodic Labour Force Survey and how they link, and what the demographic dividend means.
Poverty and Its Measurement
11 PYQsHow India draws its poverty line, from Naoroji to the Tendulkar and Rangarajan committees, how the Multidimensional Poverty Index counts the poor, and the schemes CDS asks about.
Human Development and Global Indices
21 PYQsThe idea of human development and its four pillars, how the HDI is built, the gender and health measures, and the global indices and rankings CDS quotes.
Industrial Policy
12 PYQsHow industrial output is measured (the IIP and the eight core industries), the Maharatna and Navratna companies, and the schemes from Make in India to PM MITRA.
Formula & revision sheet
5 formulas · 15 reference tables · 31 gotchas across all subtopics — the exam-eve cheat-sheet
Formula & revision sheet
5 formulas · 15 reference tables · 31 gotchas across all subtopics — the exam-eve cheat-sheet
National Income Measures
Formulas (2)
Reference tables (2)
Who measures national income in India4 rows
| Item | Fact |
|---|---|
| Compiled by | National Statistical Office (MoSPI) |
| Base year since 2015 | 2011-12 (was 2004-05)Q CDS 2017 (II): the new series moved the base year to 2011-12. |
| Headline measure in the new series | GVA at basic prices |
| NSO household and enterprise surveys | PLFS, unincorporated enterprises, social consumption (health), modular survey on telecom and ICT skillsQ CDS 2025 (II): all four of these surveys are MoSPI's. |
How the sectors share India's output5 rows
| Claim | True or false | Holds for |
|---|---|---|
| Services make up more than half of India's GVA | True | 2010s to nowQ |
| The share of services has fallen | False: it has risen sharply | Since the 1990sQ CDS 2016 (II): the share of services increased sharply. |
| Services growth is more volatile than farm growth | False: farm growth is the volatile one | Monsoon years |
| Horticulture output is larger than foodgrain output | True | Economic Survey 2025-26Q CDS 2026 (II) asked this from the Economic Survey 2025-26. |
| India is the sixth largest economy, just ahead of France | True then | World Bank data for 2017; India has since moved up to fourth (IMF, 2025)Q |
Watch out for (6)
- Domestic is not national→ From GDP to national income
- Factor cost removes taxes and adds back subsidies→ From GDP to national income
- The deflator does measure inflation→ Real and nominal GDP, the deflator and GDP per head
- The RBI does not compute GDP→ Who measures national income in India
- Manufacturing did not shrink→ How the sectors share India's output
- A GDP rank needs its year→ How the sectors share India's output
Macroeconomic Theory
Reference tables (3)
Classical economics and Keynes5 rows
| Idea | Who or what | Meaning |
|---|---|---|
| Unemployment is temporary | Classical school | Flexible wages and prices restore full employmentQ CDS 2016 (II): classical theory treats departures from full employment as purely temporary. |
| Employment depends on effective demand | J. M. Keynes | Aggregate demand meets aggregate supplyQ |
| Deficit financing | J. M. Keynes | Spend beyond revenue to lift demand in a slumpQ CDS 2022 (I): Keynes first mooted deficit financing. |
| Recessionary gap | Output below potential | Resources lie idleQ |
| Crowding in | Public investment | Raises private investmentQ CDS 2026 (II): crowding in is public investment leading to more private investment. |
Later ideas and their authors6 rows
| Idea | Author |
|---|---|
| Natural rate of unemployment | Milton Friedman (and Edmund Phelps)Q |
| Phillips curve | A. W. Phillips |
| Relative income hypothesis | James Duesenberry |
| Life cycle hypothesis | Franco Modigliani, Albert Ando, Richard BrumbergQ CDS 2019 (I): consumption depending on resources, the return on capital and age is the life cycle hypothesis. |
| Permanent income hypothesis | Milton Friedman |
| Capitalism underdeveloped the periphery by not exploiting it enough | Geoffrey KayQ |
The economic curves6 rows
| Curve | Plots |
|---|---|
| Lorenz curve | Inequality of income or wealthQ CDS 2019 (II): the Gini coefficient measures income inequality. |
| Phillips curve | Inflation and unemployment |
| Engel curve | Income and the share spent on food |
| Laffer curve | Tax rate and tax revenue |
| 45-degree line | X equals Y, with both in the same unitQ |
| Credit to GDP ratio | Position in the financial cycleQ CDS 2025 (II): credit to GDP, not the fiscal deficit, tracks the financial cycle. |
Watch out for (6)
- Effective demand, not aggregate demand alone→ Classical economics and Keynes
- Crowding in is the opposite of crowding out→ Classical economics and Keynes
- Phillips drew the curve, Friedman limited it→ Later ideas and their authors
- Deepening is per worker→ Later ideas and their authors
- The Gini measures inequality, not poverty→ The economic curves
- Phillips is inflation, Laffer is tax→ The economic curves
Employment and Unemployment
Reference tables (2)
Kinds of unemployment5 rows
| Kind | Cause | Example |
|---|---|---|
| Frictional | Changing or searching for a job | A graduate waiting for the first offer |
| Structural | Skills or places do not match the vacancies; new technology | Typists after computers spreadQ CDS 2021 (I): a mismatch between vacancies and available workers is structural unemployment. |
| Cyclical | A fall in total demand | Factory layoffs in a recession |
| Disguised | Too many hands on one job | Seven family members on a farm that needs four |
| Seasonal | Work only in one season | Farm labour after the harvest |
The demographic dividend3 rows
| Term | Meaning |
|---|---|
| Demographic dividend | Growth from a higher share of working-age peopleQ Asked twice: CDS 2017 (II) and 2019 (II). |
| Working-age population | People aged about 15 to 64 |
| Dependency ratio | Children and old people for each person of working age |
Watch out for (3)
- Disguised workers look employed→ Kinds of unemployment
- Unemployment rate is out of the labour force→ Labour force rates and the PLFS
- It is about the age mix, not the total→ The demographic dividend
Poverty and Its Measurement
Reference tables (2)
Poverty lines and the committees5 rows
| Year | Body | Key point |
|---|---|---|
| 1901 | Dadabhai Naoroji | First estimate of a poverty lineQ |
| 1979 | Alagh Task Force | 2,400 calories rural, 2,100 urbanQ |
| 1993 | Lakdawala Committee | State-wise calorie-based lines, uniform reference period |
| 2009 | Tendulkar Committee | No calorie anchor; urban basket as reference; mixed reference period; 21.9 per cent poor in 2011-12Q CDS 2024 (I): Tendulkar used the all-India urban basket as the reference, and did not anchor to calories. |
| 2014 | Rangarajan Committee | Food plus normative non-food plus behavioural non-food; 29.5 per cent poor in 2011-12Q |
Anti-poverty schemes2 rows
Watch out for (5)
- Rural calories are higher, not lower→ Poverty lines and the committees
- Tendulkar moved away from calories→ Poverty lines and the committees
- Years of schooling, not literacy→ The Multidimensional Poverty Index
- 100 days, unskilled, rural→ Anti-poverty schemes
- UBI is universal→ Anti-poverty schemes
Human Development and Global Indices
Reference tables (3)
The idea of human development5 rows
| Item | Fact |
|---|---|
| Concept of human development | Mahbub ul Haq, first Human Development Report 1990Q |
| Four pillars | Equity, sustainability, productivity, empowermentQ CDS 2023 (II): security is not one of the pillars. |
| Basic needs approach | Proposed by the ILO; six needs from health to housingQ |
| Capability approach | Amartya Sen |
| Gross National Happiness | Bhutan, the only country to adopt it officiallyQ |
Gender, health and social spending4 rows
| Measure | Fact |
|---|---|
| Gender Inequality Index | Reproductive health, empowerment, labour market; 0 means equalityQ |
| Infant mortality, India | About 28 per 1,000 live births (2020); not comparable to China, the USA or Sri LankaQ |
| Life expectancy, India | Female above male; urban above ruralQ CDS 2022 (II): male life expectancy above female is what you would not see. |
| Education spending, 2014 to 2019 | About 3 per cent of GDP, stagnantQ |
Global indices and India's rank4 rows
| Index | Published by | India, with year |
|---|---|---|
| Global Competitiveness Index | World Economic Forum | Three sub-indices in 2016-17; no life expectancy sub-indexQ |
| Ease of Doing Business | World Bank (stopped 2021) | 142 in 2014 to 63 in 2019; registering property worsenedQ |
| Global Innovation Index | WIPO | 81 in 2015, 40 in 2023, 39 in 2024Q Asked twice: CDS 2024 (I) and 2025 (II). |
| SDG India Index | NITI Aayog | 2020-21 bottom three: Bihar, Jharkhand, AssamQ |
Watch out for (6)
- Haq built it, Sen shaped the idea→ The idea of human development
- Mortality is not an HDI indicator→ The Human Development Index
- Order ranks with the report's year→ The Human Development Index
- Property and income are not GII dimensions→ Gender, health and social spending
- A rank is true only for its year→ Global indices and India's rank
- Overall rank up, one parameter down→ Global indices and India's rank
Industrial Policy
Reference tables (3)
The IIP and the eight core industries8 rows
| Core industry | Weight in the core index (per cent) |
|---|---|
| Refinery products | 28.04 |
| Electricity | 19.85 |
| Steel | 17.92 |
| Coal | 10.33 |
| Crude oil | 8.98 |
| Natural gas | 6.88Q CDS 2018 (I): natural gas was the core industry with negative growth in 2015-16. |
| Cement | 5.37 |
| Fertilizers | 2.63 |
Maharatna, Navratna and Miniratna companies5 rows
| Company | Status | Note |
|---|---|---|
| Coal India Limited | Maharatna | World's largest coal producer; headquarters Kolkata, not RanchiQ |
| IndianOil Corporation | Maharatna | Oil refining and marketing |
| GAIL (India) | Maharatna | Natural gas |
| Bharat Petroleum | Maharatna | Upgraded in 2017 |
| Bharat Electronics | Navratna | Defence electronics |
Industrial schemes and missions5 rows
| Scheme | Year | Aim |
|---|---|---|
| Invest India | 2009 | National investment promotion and facilitation agency; non-profit joint ventureQ |
| Make in India | 2014 | Investment, innovation, skills, manufacturing infrastructureQ CDS 2019 (II): launched in 2014, not 2018. |
| Startup India Fund of Funds 2.0 | 2025 | About ₹10,000 crore for deep-tech startups, run through SIDBIQ |
| Atmanirbhar Bharat | 2020 | Manufacturing and exports; foreign investment in domestic productionQ |
| PM MITRA | 2021 | Integrated textile and apparel parks |
Watch out for (5)
- Two different bodies→ The IIP and the eight core industries
- Primary goods outweigh capital goods→ The IIP and the eight core industries
- Coal India sits in Kolkata→ Maharatna, Navratna and Miniratna companies
- SIDBI runs the startup fund, not NITI Aayog→ Industrial schemes and missions
- Old sectors are not sunrise sectors→ Industrial schemes and missions
PYQ weightage by concept
20 concepts · 79 PYQs — where the marks actually sit, so you know what to drill first
PYQ weightage by concept
20 concepts · 79 PYQs — where the marks actually sit, so you know what to drill first
National Income Measures13 PYQs · 16%
| Concept | PYQs | Share |
|---|---|---|
| How the sectors share India's output | 6 | 8% |
| Real and nominal GDP, the deflator and GDP per head | 3 | 4% |
| From GDP to national income | 2 | 3% |
| Who measures national income in India | 2 | 3% |
Macroeconomic Theory14 PYQs · 18%
| Concept | PYQs | Share |
|---|---|---|
| Classical economics and Keynes | 6 | 8% |
| Later ideas and their authors | 4 | 5% |
| The economic curves | 4 | 5% |
Employment and Unemployment8 PYQs · 10%
| Concept | PYQs | Share |
|---|---|---|
| Labour force rates and the PLFS | 4 | 5% |
| Kinds of unemployment | 2 | 3% |
| The demographic dividend | 2 | 3% |
Poverty and Its Measurement11 PYQs · 14%
| Concept | PYQs | Share |
|---|---|---|
| Poverty lines and the committees | 5 | 6% |
| The Multidimensional Poverty Index | 3 | 4% |
| Anti-poverty schemes | 3 | 4% |
Human Development and Global Indices21 PYQs · 27%
| Concept | PYQs | Share |
|---|---|---|
| Global indices and India's rank | 7 | 9% |
| The idea of human development | 5 | 6% |
| The Human Development Index | 5 | 6% |
| Gender, health and social spending | 4 | 5% |
Industrial Policy12 PYQs · 15%
| Concept | PYQs | Share |
|---|---|---|
| Industrial schemes and missions | 7 | 9% |
| The IIP and the eight core industries | 3 | 4% |
| Maharatna, Navratna and Miniratna companies | 2 | 3% |
Test yourself on National Income, Growth and Development Indicators
20 past CDS questions from this chapter, timed at 20 minutes and marked the way the exam marks it. You see your score and every answer the moment you finish. Free to start.