CBSE Class 12 Economics

Strategic preparation starts with knowing where the marks are. The 2026 syllabus is divided into two equally weighted parts of 40 marks each.

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 (two sector model); Methods of calculating National Income - Value Added or Product method, Expenditure method, Income method.
• Aggregates related to National Income: Gross National Product (GNP), Net National Product (NNP), Gross Domestic Product (GDP) and Net Domestic Product (NDP) - at market price, at factor cost; Real and Nominal GDP.
• GDP Deflator, GDP and Welfare

Note for Students: This unit covers the foundational principles of macroeconomics and the various methodologies used to measure a nation's economic performance and total output.

Unit 2: Money and Banking (06 Marks)

• Money – meaning and functions, supply of money - Currency held by the public and net demand deposits held by commercial banks.
• Money creation by the commercial banking system.
• Central bank and its functions (example of the Reserve Bank of India): Bank of issue, Govt. Bank, Banker's Bank, Control of Credit through Bank Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate and Reverse Repo Rate, Open Market Operations, Margin requirement.

Note for Students: Students will explore how money is created within the banking system and the critical role of the Central Bank in regulating the economy through monetary policy.

Unit 3: Determination of Income and Employment (12 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 them - changes in government spending, taxes and money supply.

Note for Students: This unit focuses on the Keynesian framework of income determination and identifies strategies to address economic imbalances like inflation and deflation.

Unit 4: Government Budget and the Economy (06 Marks)

• Government budget - meaning, objectives and components.
• Classification of receipts - revenue receipts and capital receipts; Classification of expenditure – revenue expenditure and capital expenditure.
• Balanced, Surplus and Deficit Budget – measures of government deficit.

Note for Students: Understand how the government plans its income and expenditure to achieve socio-economic objectives and manage fiscal health.

Unit 5: Balance of Payments (06 Marks)

• Balance of payments account - meaning and components; Balance of payments – Surplus and Deficit
• Foreign exchange rate - meaning of fixed and flexible rates and managed floating.
• Determination of exchange rate in a free market, Merits and demerits of flexible and fixed exchange rate.
• Managed Floating exchange rate system

Note for Students: This unit explains international economic transactions and the mechanisms that determine the value of domestic currency against foreign currencies.

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

• A brief introduction of the state of Indian economy on the eve of independence.
• Indian economic system and common goals of Five Year Plans.
• Main features, problems and policies of agriculture (institutional aspects and new agricultural strategy), industry (IPR 1956; SSI – role & importance) and foreign trade.
• Economic Reforms since 1991: Features and appraisals of liberalisation, globalisation and privatisation (LPG policy); Concepts of demonetization and GST

Note for Students: Gain a historical perspective on India's economic journey from independence through the landmark structural reforms of the early 1990s.

Unit 7: Current challenges facing Indian Economy (20 Marks)

• Human Capital Formation: How people become resource; Role of human capital in economic development; Growth of Education Sector in India
• Rural development: Key issues - credit and marketing - role of cooperatives; agricultural diversification; alternative farming - organic farming
• Employment: Growth and changes in work force participation rate in formal and informal sectors; problems and policies
• Sustainable Economic Development: Meaning, Effects of Economic Development on Resources and Environment, including global warming

Note for Students: This comprehensive unit analyzes the contemporary social and economic hurdles India faces, emphasizing sustainable growth and human resource development.

Unit 8: Development Experience of India: A Comparison with Neighbours (08 Marks)

• A comparison with neighbours
• India and Pakistan
• India and China
• Issues: economic growth, population, sectoral development and other Human Development Indicators

Note for Students: Evaluate India's relative economic standing by comparing developmental trajectories and human development indicators with neighboring nations.

Part C: Project Work (20 Marks)

• Project in Economics: Guidelines as given in Class XII curriculum

Note for Students: The project work allows for the practical application of economic theories through independent research, data analysis, and formal presentation.

Expert Tips for 100/100 (H4)

a) Step-Wise Numericals: Remember that in National Income, marks are given for identifying the correct formula and showing calculation steps.

b) Underline Keywords: In Part B, use specific NCERT terms like Absorptive Capacity or Gestation Period and underline them to help examiners find your points easily.

c) Project Precision: Ensure that your project file is updated with the latest data trends and show real world scenario during the Viva.