Designing an Employment Strategy The employment elasticity with respect to output is surprisingly low in agriculture. It was negative in the period, 2013-14 to 2017-18. The trend is for a shift to off-farm rural employment or migration to the urban areas. Therefore, the case for higher investment must now be made more for food security and export promotion. The high employment elasticities are observed more in sectors like manufacturing, construction, transport and communications. It is also relatively high in the community, social and private services. This has been due largely to the rapid expansion in the number of government employees after 2009-10. This is no longer possible given the acute financial constraint faced now by the public sector. Therefore, fiscal, monetary, trade and investment policies must target the manufacturing, construction and the transport and communications sectors as the leading sectors for generating employment. This is already evident in the high priority attached to the construction sector. 27.3. Providing more Employment The Employment Target Chapter 1 has given targets for the level of employment and the resultant unemployment rate. These are replicated in Table 27.9. The target is to reduce the‘open’ unemployment rate from 15 percent in 2019-20 to a modest 6.5 percent by 2024-25. The question is what strategy will help in achieving this ambitious target? Table 27.9: Targets for Level of Employment and Reduction in The Unemployment Rate up to 2024-25 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Labor Force(million) 68.8 70.5 72.2 73.8 75.8 78.0 Employment(million) 58.5 63.0 64.4 67.1 69.8 72.9 Unemployment Rate(%) 15.0 10.6 10.0 9.0 8.0 6.4 Source: Estimates Sectoral Growth Strategy The first element of the strategy is determination of the sectoral composition of GDP and individual sectoral growth rates which will create the targeted level of demand for labor. This requires quantification of the sectoral employment to output growth elasticities. Estimates of these elasticities from 2007-08 to 2017-18 are given in Table 27.10. 287