Today’s Tuesday post is going to be something special. These days many people are talking about the development in India and some of them feel that the standard of living as well as the economic status of people Socio-Economic actually come down in last 2 years due to demonetization and Govt has failed to create jobs. Today through my post with factual data I will make few points which I think will give the answers to all those who feel India is going down.
From the 1960s we measure the socioeconomic classification to see the economic development of the country. Firstly, let me explain what exactly is Socio-Economic Classification. SEC is a classification of Indians on the basis of predefined factors and conditions. TheSEC system is used to classify households in India to be and it is based on two variables, they are:
- Education of Chief Wage Earner
- The Number of Consumer Durables owned by a family.
Apart from education of the person in the family, the other things considered are the Consumer Durables that the council had decided and made the list of. There are about 11 consumer durable products that Govt has identified. Every household is measured on the education qualification of the wage earner and the number of durables out of 11 that they own. Here is the list:
- Electricity Connection
- Ceiling Fan
- Gas Stove
- Refrigerator
Two wheeler - Washing Machine
- Colour TV
- Computer/Laptop
- Four wheeler
- Air Conditioner
- Agricultural Land
A person can own 9 out of these 11 durables to be eligible for getting the highest classification of A1. The other classifications are A2, A3, B1, B2, C1, C2, D1, D2, E1, E2, and E3.
How does this Social EconomicClassification help to understand the development in the Country?
It will very well give an idea of the development of the country and that’s because we are looking at two variable of education and the expenditure by a citizen of the Country. Though they are necessities, that’s not all the time. Thus by looking at the scale of SEC one can make out the purchasing power of the consumer and as well the product they look at brings out their education levels.
Coming back to the point, just look at the slide that I have provided along with the post. This is from a research done by IRS which is a premier body of Govt, AC Neilson a leading market research firm and the data was authenticated internationally and no doubts were raised on the factual details it provides. Look at the number of people in SEC D and E in 2014. Their percentage is 54%. That means more than half of India is in the bottom layer where they don’t own more than 3 consumer durables out of the 11 given here. Just compare it with 2017. That percentage came down to 40%. That means 14% people moved to higher classification in a span of 3 years which is the fastest in the history of India.
Where did they move?
Now take a look at SEC A3, B and C. In 2014 it was 40% and now it is 54%. That means more than half of India owns 6-7 consumer durables now. If your jobs are not stable, if your income levels are not higher, how can 14% of people buy 3-4 more consumer durables than what they were owning 3 years ago? You tell me, have you seen this kind of rapid development before?
In short majority of India owns just 3 durables in 2014. Now they own 7 consumer durables. If the same rate of growth continues, it is projected that 70% of population will be in SEC A, B and C segments. Just to tell you in 2008, 46% of population was in SEC E, which is the poorest of poor. From that we are rapidly developing. Finally development is measured by the way standard of living of people improves, not by any empty political talk.
