The Media Research Users' Council (MRUC) alongwith the Market Research Society of India (MRSI) has rolled out the new socio-economic classification (SEC) system, under which all Indian households will be classified.

The new grading system comes in force five years after the process was initiated by the MRUC and MRSI to give more relevance to the system.

Lloyd Mathias, chairman, MRUC and president, corporate monitoring, Tata Teleservices, said, ''In 2006, extensive research and inputs from industry experts had thrown up a burning need to revisit the classification system, given that the market environment, as also consumer profiles, preferences and attitudes had undergone a sea-change over the last three decades.''

The new system will classify Indian households by using two parameters -- educational qualifications of the chief wage owner in the household, and the number of assets owned (out of a pre-specified list of 11 assets).

Based on these two parameters, each household will be classified in one of 12 SEC groups -- A1, A2, A3, B1, B2, C1, C2, D1, D2, E1, E2 and E3, which will be applicable to both urban and rural India.

''The new system will now play up rural as aggressively as urban and not in silos as done earlier,'' Mathias added.

Praveen Tripathi, chief executive officer, Magic 9 Media and Consumer Knowledge, who has been involved with the development of the new system from MRUC's side, said, ''Given that the new SEC system classifies households on parameters different from the old system, it will not be proper to compare the old SEC classes with their equivalent ones from the new SEC - even if the two carry the same alphanumeric tags.''

The formulation of the new SEC system has largely been done using the Indian Readership Survey (IRS) database. The developmental work has also used IMRB's 'household panel' data.

Tripathi added that they expected marketers to adopt both the systems during the transition period, while efforts are on from their side to get all the major research bodies to start using the new SEC system.

LV Krishnan, chief executive officer, TAM Media Research said that TAM will be adopting the system as early as July 2011.

''We will definitely be adopting the new system and provide the ratings using both the systems initially. Based on industry feedback, we will phase out the old system,'' he said.

Since the classification depends on ownership of consumer durables, the system will be revisited once every two years to make the classification more accurate. 

Under the new system, the top-most new SEC class A1 comprises of 0.5 per cent of all Indian households. Nearly 2 per cent of urban households and less than 0.1 per cent of rural households belong to the new SEC A1.  More than half of all SEC A1 households reside in the top six Indian cities-Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad.

At the other end of the spectrum, the bottom-most new SEC class E3 comprises of 10 per cent of all Indian households. Only 2 per cent of urban households and 13 per cent of rural households belong to new SEC E3. Nearly 93 per cent of all SEC E3 households are in rural India.