Class XII Economics Syllabus 2019-2020 (Macro & Indian Economic Development)

Part A: Introductory Macroeconomics (40 marks)

• Unit 1: National Income and Related Aggregates
• Unit 2: Money and Banking
• Unit 3: Determination of Income and Employment
• Unit 4: Government Budget and the Economy
• Unit 5: Balance of Payments

Part B: Indian Economic Development (40 marks)

• Unit 6: Development Experience (1947-90) and Economic Reforms since 1991
• Unit 7: Current Challenges facing Indian Economy
• Unit 8: Development Experience of India - A Comparison with Neighbours

Project Work (20 marks)

Each student is required to complete a project on a topic related to economics.

Unit 1: National Income and Related Aggregates (10 marks)

What is macroeconomics? Basic concepts in macroeconomics: consumption goods, capital goods, final goods, intermediate goods, stocks and flows, gross investment and depreciation. Circular flow of income; concepts of product, income, and expenditure.

Methods of calculating National Income: Value Added method, Income method, Expenditure method. Aggregates related to National Income: Gross National Product (GNP), Net National Product (NNP), Gross and Net Domestic Product (GDP and NDP), per capita income. Real and Nominal GDP, GDP and Welfare.

Unit 2: Money and Banking (6 marks)

Money: meaning, supply of money functions of money, demand for money (precautionary, transactional, speculative motives). Commercial Banks: meaning, functions, credit creation process. Central Bank: meaning, functions (bank of issue, banker's bank, controller of credit, lender of last resort, custodian of foreign exchange). Money creation by commercial banks in partnership with the Central Bank.

Unit 3: Determination of Income and Employment (10 marks)

Aggregate demand and its components. Propensity to consume and propensity to save (average and marginal). Short-run equilibrium output; investment multiplier and its mechanism. Meaning of full employment and involuntary unemployment. Problems of excess demand and deficient demand. Measures to correct these problems: changes in government spending and taxation.

Unit 4: Government Budget and the Economy (6 marks)

Meaning, types, and objectives of government budget. Components of budget: revenue receipts, capital receipts, revenue expenditure, capital expenditure; balanced, surplus, and deficit budgets. Types of deficits: revenue deficit, fiscal deficit, primary deficit. Fiscal policy and its role in influencing economic activity.

Unit 5: Balance of Payments (8 marks)

Balance of Payments accounts: meaning, components. Balance of Trade: meaning, favourable and unfavourable. Foreign exchange rate: meaning (fixed and flexible), methods of determining. Determinants of foreign exchange rate. Managed floating exchange rate.

Unit 6: Development Experience (1947-90) and Economic Reforms since 1991 (12 marks)

A brief overview of the state of Indian economy on the eve of independence. Indian economic system and common goals of Five Year Plans. Main features: agriculture, industry, and services. Problems and policies related to development sector. Economic reforms since 1991: Liberalization, Privatization, and Globalization (LPG) - need, features, and appraisal. Impact of economic reforms on various sectors.

Unit 7: Current Challenges Facing Indian Economy (20 marks)

Human Capital Formation: Meaning, characteristics, and sources. Problems of human capital formation.

Rural Development: Meaning and importance. Key issues: credit, marketing, diversification, organic farming. Role of cooperatives in rural development.

Employment: Formal and informal sectors; growth, informalization, and other issues. Government initiatives.

Infrastructure: Meaning and types - economic and social. Infrastructure and economic growth. Relevance of infrastructure in development.

Sustainable Economic Development: Meaning, concept, and indicators of sustainable development. Problems of sustainable development. Strategies for sustainable development in India.

Unit 8: Development Experience of India - A Comparison with Neighbours (8 marks)

Comparative development experiences of India and its neighbours: Pakistan and China. A brief overview of the developmental strategies of China and Pakistan. India, China and Pakistan: development indicators, growth strategies, and sectoral development. Issues in development strategies followed by India, China and Pakistan.

Project work aims to enable students to identify and explore economic issues around them. Students may choose any one of the following:

• Collection and organization of data from secondary sources on selected themes.
• Case studies based on secondary data.
• Survey-based project work.
• Analysis of data using statistical tools, graphs, and diagrams.

The project report must include: introduction, objectives, methodology, analysis, conclusion, and bibliography.

NCERT Textbooks:

• Introductory Macroeconomics - Class XII
• Indian Economic Development - Class XII

Supplementary Reading Material:

• CBSE and NCERT publications, reports, newspapers and magazines like Economic Times, Business Standard, etc.

• Focus on understanding concepts rather than rote memorization.
• Practice diagrams and tables for theoretical concepts in macroeconomics.
• Solve numerical problems related to national income accounting, multiplier, and foreign exchange rates.
• For Indian Economic Development, use current examples and data to explain concepts.
• Revise definitions of key terms as direct questions are often asked.
• Prepare thoroughly for project work as it carries 20 marks and can significantly improve your overall score.
• Solve previous years' question papers to understand the pattern and frequently asked questions.