Charter of the Economy Table 27.10: Sectoral Employment to Output Elasticities, 2007-08 to 2017-18 Annual Growth Rate of Value Added(%) Annual Growth Rate of Employment (%) Employment­to-Output Elasticity Agriculture 2.3 0.8 0.348 Manufacturing 3.0 4.4 1.467 Construction 3.7 4.2 1.135 Wholesale and Retail Trade 2.5 2.5 1.000 Transport and Communications 3.8 3.5 0.921 Community, Social and Personal Services 7.1 3.0 0.422 Others 3.0 0.7 0.233 TOTAL 3.6 2.3 0.638 Source: PBS, LFS and PES There are large differences in the sectoral elasticities. It is very low at 0.35 in the case of agriculture. As development proceeds, the labor force in agriculture typically shifts to other sectors of the economy as highlighted above. The elasticities are above one in two sectors of the economy – manufacturing and construction. They are close to one in the case of wholesale and retail trade and transport and communications. These sectors will have to play a leading role in creating employment in the economy over the next five years. The required employment to output elasticity from 2020-21 to 2024-25 is 0.70, as compared to 0.64 between 2007-08 and 2017-18. The GDP is expected on average to grow annually by 5.1 percent and employment by 3.6 percent. This is achievable with the sectoral growth rates of 6 percent to 8 percent in manufacturing and construction sectors and from 5 percent to 6 percent in the wholesale and retail trade and transport and communication sectors. The incentives given to investment in housing and construction activities must continue. Employment of Educated Workers The issue relates to the composition of incremental employment. Table 27.11 has demonstrated that the highest rates of unemployment are observed in the case of the most educated workers. This structural problem will have to be tackled both on the supply and demand side. This will require a fundamental change in the education policy on the expansion of enrollment at different levels of education. The historical pattern of growth in enrollment is given in Table 27.11. 288