Economics is a subject that you can opt for even in high school. Hope you would have gone through our earlier post on ‘Career Options for Economics Enthusiasts’. Economics with science is sought after as it allows students to gain in-depth knowledge of PCMB while also studying a subject that forms the very basis of the way governance systems function. Economics career choices will not only provide you a profession but a work profile that you can be proud of. It allows you to contribute towards societal well-being.
Monetary Policy meant to decide on interest rates; Gross Domestic Product, Gross National Product, etc. can all be learnt about through economics. Consumption, Investment and Government Spending (C+I+G), money multiplier, central banks, currency and bonds are the terms that may not be described elsewhere in a lucid manner as it is done in high school books.
Concepts that help you understand the world better:
Consumer Price Inflation, WPI (Wholesale Price Inflation) and Core Inflation numbers give the rate of change of price for goods inclusive of fuel and food; without food items; and without fuel and food respectively. WPI is known as headline inflation but the Reserve Bank of India in its report has set the target range of CPI. Inflation targeting has been RBI’s endeavour under Raghuram Rajan and the new RBI Governor Urjit Patel. In the last few months, the CPI number went beyond 6% but the target was to keep it between 4-6%.
External Commercial Borrowing under automatic approval or the one for which the Reserve Bank of India’s approval is sought allows organizations to borrow in currencies such as dollars, Euro or the Yen. The RBI comes into picture only when the funds required (in Dollars) are more than an amount specified by the central bank. This runs into billions of dollars.
- Balance of Payments
The difference between the funds received from remittances made by citizens living abroad, earnings from exports, foreign exchange earned from other sources and the ones that the country spends on imports, travel, investment abroad, etc. is considered as balance of payments. This can also lead to a full-fledged crisis. The 1991 reforms came after a severe ‘Balance of Payments’ crisis in India.
- Currency Reserves
These are reserves built over the years through currency earned by exporters, remittances from abroad, etc. Exporters earn in foreign currency; this currency needs to be exchanged for Indian currency for use in India. The dollars are thus sold to banks and reserves are built for the country. When the currency depreciates the Central bank can sell dollars and to support an appreciating Rupee, Dollars are sold by the RBI.
- Fiscal Deficit
It is the difference between the planned expenditure and what the Government can spend through the taxes collected. Under the FRBM Act 2003, by 2007-08 it was required that the fiscal deficit come to a percentage below 3%. The 2007 financial crisis led to the number touching 6.3% as the Government decided to increase spending in order to support the industry and consumption in the country.
Fiscal deficit targets are set every year under FRBM Act 2003 (Fiscal Responsibility and Budget Management Act); the goal is to bring it down to 3%. Recession being experienced around the world and the Indian growth number not being in the 7-8% mark led to the Government increasing its spending and the fiscal deficit reached 6.3%.
Economics career choices that intrigue:
Big data & data analysis are two terms that make it even to the pages of ‘The Economist’ as large amounts of data is generated by retail stores (handled by the likes of Dunnhumby); and also by banks such as RBS, ICICI, American Express which employ analysts to build models for prediction and to avoid frauds and delinquency. This one out of economics career choices allows for a profile that combines technology with economics.
- Business Magazines / Newspapers
Those with an Economics background work for business newspapers and magazines, writing reports on the business world, regulatory environment and politics and on what’s making news in the current scenario.
Researchers work at institutions like the National Council of Applied Economic Research, RIS and ICRIER at positions starting from Research Analyst to Senior Fellow. For a higher position, you need a Ph.D. degree.
A master is good enough only for the research analyst position. You can be an associate fellow and move on to be a Senior Fellow with a Ph.D. in Economics in fields such as Developmental Economics, Monetary Economics, Public Policy, etc. These are economists who prepare reports on the proposed and existing policies and plans that the Government wishes to implement or has already implemented. For instance, MNREGA. Sector-specific reports are also prepared at institutions like NCAER such as its recent report on Steel Industry.
- IES / IAS (Indian Economic Services and Indian Administrative Services)
Recruitment tests are held for these posts; IAS officers are more high profile than IES officers, even though IES officers are the ones supposed to be working on policies. It is the IAS officers who work with the ministers on programmes of national importance. Chief Economic Advisor of the country is a coveted job post one can reach only if one thinks of these economics career choices early in life.
Professors on leave from schools such as the Chicago Booth School, Harvard Business School, Massachusetts Institute of Technology can occupy positions of repute as the Reserve Bank of India Governor, advisors to the Government, etc. Raghuram Rajan and Gita Gopinath are two such people, teaching at Chicago Booth School and Harvard Business School respectively.
Gita Gopinath has recently been appointed as the economic advisor to the Kerala Government. This is an obvious one out of the economics career choices listed in this post; it allows for societal contribution, pedagogical work and research.