ASSIGNMENT 2

Old SEC, New SEC and NCCS

SEC
SEC is an indicator of the propensity of a consumer to
purchase different products. High SEC rating suggests
that the household has a high propensity to purchase
high value items. Note that this does not imply that
households with low SEC profile do not purchase high
value consumer goods but they merely have a low
propensity to do so.
OLD SEC
In the older version, the SEC classification consists of
two grids.
The Urban SEC Grid, which uses Education Levels
and Occupational criteria of the Chief Wage Earner
of a household as measures to determine socio-
economic classification, and segments urban India
into 7 groups (A1 to E2) and
The Rural SEC Grid, which uses Education and Type
of House (Pucca, Semi-Pucca and Kuccha) as
measures of socio-economic class, and segments
rural India into 4 groups (R1, R2,R3,R4)

This is based on the assumption that higher education

leads to higher income thus higher consuming
potential. But we know that this may not be true
always. A trader or a retailer with no qualification can
earn more income than a Post graduate executive, but
SEC will categorize the traders/retailers not as SEC A1or
A2.

So, in order to combat this problem, the Government

came up with the new SEC system on 3 May 2011.
The New Socio Economic Classification
(NCCS)
Planning on NCCS started way back in 2004. In 2011
NCCS was launched which was based on Education of
Chief Wage Earner and the Number of Consumer
Durables in the Household. This implied that the
affluence would be measured by the number of
consumer durable owned. The underlying assumption
being consumption begets consumption.
The NCCS (or New SEC system as it is referred to in
the MRSI documents) was co-developed by MRSI
(Market Research Society of India) and MRUC (Media
Research Users Council) as the new classification
system for industry use.
NCCS - The New SEC system is used to classify
households in India and is based on two variables:
Education of Chief Wage Earner
Number of Consumer Durables (from a predefined
list) owned by the family. The list has 11 items, ranging
from electricity connection to cars and air conditioners;
including agricultural land in rural areas.
About NCCS the new SEC:
NCCS the new SEC was developed after extensive
analysis of various discriminators that would best
define the purchasing power of a household.
Alternative systems a point based system
including education of CWE, press exposure of
housewife, ownership of durables and user ship of
consumer goods; and a system considering best
type of consumer durables owned - were
considered before settling on the present NCCS
the new SEC.
Assumption is that a system that throws up more
inequalities is more discriminating.
 The 11 shortlisted durables were identified as the
best discriminators of the purchasing power of a
household after evaluating the series of variables,
including education of housewife, type of dwelling
(house), amenities, number of rooms, ownership of
durables and usership of consumer goods.
Discriminating durables (as on date): Electricity
Connection, Ceiling Fan, Gas Stove, Refrigerator,
Two Wheeler, Washing Machine, Colour TV,
Computer, Four-wheeler, Air Conditioner,
Agricultural Land (in rural areas).

On the basis of the Consumer Durables owned

On the basis of education of the CWE

THE DIFFERENCE BETWEEN OLD SEC AND NEW
SEC (NCCS)