Economics: The new frontier in India's leading technical institutes

Business Standard

3 days ago

In the hallowed halls of India's premier technical institutions, a quiet revolution is unfolding. Once considered a secondary subject to engineering and technology, economics has steadily climbed the ranks, carving out a prominent place at institutions like the Indian Institutes of Technology (IITs), Birla Institute of Technology and Science (BITS), and the Indian Institutes of Science Education and Research (IISERs). The discipline—traditionally seen as theoretical—has evolved into a dynamic and essential field that complements and enhances the technical education these institutions offer. As a result, economics is no longer relegated to the sidelines of engineering education; it is now demanding centre stage.
The annual IIT Joint Entrance Examination (JEE), one of the most competitive academic exams in India, is just around the corner. Following the exam, students will participate in counselling sessions to select their preferred branches of study. In the past, fields like mechanical, civil, and electrical engineering dominated these preference lists. However, in recent years, a surprising trend has emerged: economics is increasingly being chosen as a preferred discipline, often outpacing some of the more traditional engineering fields (see figure below for opening and closing rank for different programmes in IIT Kanpur for year 2024). This shift has prompted both parents and students to reconsider their views on the discipline and its potential.
So, what is driving this shift? The answer lies in the transformation of economics itself. India has traditionally approached economics in a qualitative manner, emphasising theoretical concepts and broad social insights. However, modern economics has become increasingly quantitative, leveraging data analysis and statistical tools to solve real-world problems. This shift to quantitative methods has made economics a highly applicable field, particularly in sectors like data science, public policy, and finance. At leading institutions like IITs and BITS, economics programmes have evolved to focus on the application of analytical frameworks and quantitative methods. This focus on quantitative economics is what gives technical institutions like IITs and IISERs a distinct comparative advantage. These institutes are well-suited to deliver a modern curriculum, as they are already equipped with the technical infrastructure and expertise to teach complex mathematical models, data analysis, and econometrics effectively. This shift has made economics not only relevant but also indispensable in a world that increasingly requires cross-disciplinary expertise.
For many students, economics offers more than just a theoretical understanding of markets and economies. It provides them with a broad set of analytical and quantitative skills that are highly transferable across industries. These skills are particularly valuable in a job market where flexibility and adaptability are prized. Students who opt for economics over traditional engineering disciplines are often motivated by the wide range of career pathways the subject offers. From data science to public policy, from finance to artificial intelligence, the versatility of economics creates opportunities across multiple sectors, making it a compelling choice for ambitious students.
This growing appeal of economics is part of a broader trend. As industries and technologies evolve, the challenges of tomorrow will demand not only technical know-how but also an understanding of human behaviour, market dynamics, and policy implications. Take, for example, the way companies like Uber and Amazon have disrupted traditional industries. While technical innovations played a major role in these transformations, it was economists who helped provide the analytical frameworks that guided them. Microeconomics helps decode complex business models; econometrics teaches evidence-based decision-making; and macroeconomics links local economic trends to global developments.
The rise of economics in India's top technical institutes also coincides with the government's push for reforms in education. India's National Education Policy 2020 emphasises critical thinking, interdisciplinary approaches, and the integration of diverse fields of knowledge—qualities where economics naturally excels. Unlike more specialised technical disciplines, economics bridges the gap between hard data and human behaviour. It draws from history to understand economic systems, from psychology to explain consumer behaviour, and from computer science to analyse vast datasets.
In response to the growing demand for economics education, many institutions have begun to invest in cutting-edge research facilities and industry partnerships. By incorporating real-world data and engaging with policymakers, these institutions aim to provide students with hands-on experience that reflects the complexities of the modern economy. At IITs and BITS, this has resulted in the development of specialised programmes that combine technical and economic expertise, equipping students to address challenges like technological disruptions, global trade dynamics, and resource management.
However, despite its rising prominence, the journey of integrating economics into technical education is not without its challenges. One of the primary hurdles is the difficulty of simulating real-world economic scenarios in a classroom setting. Traditional lecture formats, which dominate much of technical education, often struggle to provide the kind of experiential learning that students need to understand the intricacies of economics. To bridge this gap, universities are increasingly looking towards collaborations with industry leaders and policymakers, giving students opportunities to work on practical, real-world problems.
Moreover, the curriculum itself must constantly evolve to incorporate emerging fields like behavioural economics, digital finance, and the application of artificial intelligence to economic models. This is an area where technology institutes have a distinct advantage. Their ability to rapidly adapt and introduce new courses and specialisations ensures that students are equipped with the latest knowledge and skills, keeping them competitive in the job market.
Despite these challenges, the trajectory for economics in India's top technical institutions is clear. As the country positions itself in the global knowledge economy, economics has shifted from being a complementary subject to an essential pillar of technical education. For students weighing their options after the JEE, choosing economics is no longer just about securing a degree in an abstract subject. It represents a new way of thinking—one that combines technical solutions with a deep understanding of human behaviour, market dynamics, and the broader socio-economic forces that shape the world.
Economic knowledge is essential to understanding and shaping our world in this new era. With India's top technical institutions hosting its brightest minds, the future of economics appears more promising than ever.
Bikramaditya Datta is an Associate Professor in the Department of Economic Sciences at IIT Kanpur and specialises in finance related research. Vimal Kumar is a Professor in the Department of Economic Sciences and Wadhwani School of Advanced AI & Intelligent Systems at IIT Kanpur and does research related to digital economy.