Understanding budget and economic policies is crucial for the UPSC exam, particularly in the context of Indian economy and governance. Candidates need to be familiar with concepts such as fiscal policy, monetary policy, and the implications of budgetary allocations on public welfare. Awareness of how economic decisions impact various sectors can significantly influence policymaking roles within civil services. Knowledge in this area also assists in critical analysis of government initiatives, fostering informed opinions on economic reforms vital for civil service responsibilities.