Dr. K.S. Ingole, Associate Professor, Dept of Economics Post Graduate Studies and Research,
SNDT Women’s university, Mumbai

A caste system is the major feature of Indian society, it is not only reflects in social life of Indian
people but also economic and political behavior of people are governed by the caste system.
Caste is the identity of a person in Hindu society. In India, exclusion or inclusion in the economic
activities such as production, distribution or any gainful job to a particular person depend by his
caste. In social science literature the concept of social exclusion is defined as ‘the process
through which individuals belonging to some groups are wholly or partially excluded from full
participation in the society in which they live’. The unfavorable inclusions with unequal
treatment may carry the same adverse effects as unfavorable exclusion.
The purpose of this study is to examine the caste as exclusion of backward castes people from
social respects and economic benefits, and to find out its implication on economic development
in general and in particular of backward castes.
The meaning and nature of caste
Caste is a term derived from a Portuguese word, casta, meaning breed, lineage, or racei. It is a
term used to identify the different social segments within the caste based Hindu society. Each
caste has its own customs, rituals, family deities and food habits. According to Dr Babasaheb
Ambedkar, it is mainly the custom of endogamy that has preserved the castes and prevented
one caste from fusing into another. Almost all the writers and scholars conform to this view of
Dr. Babasaheb Ambedkar. Sociologist G. S. Ghurye following features of caste
1 Segmented division of society
2 Hierarchies
3 Restrictions on feeding and social inter-course
4 Civil and religious disabilities and privileges of different sections
5 Lack of unrestricted choice of occupation
6 Restrictions on marriage
Prof. Ghurye holds that caste in India is a Brahminic child and that endogamy, the outstanding
feature of caste was first developed by the Brahmin. The functions of caste can be understood
only with regard to the caste system. The caste system is the foundation on which Hindu
society is built. Dr. Ambedkar says: by the Hindu social system the communities are placed in an
ascending scale of reverence and a descending scale of contempt.ii The Hindu caste system is a
pyramid like social structure in which the majority of the lowest castes are forcibly kept at the
bottom of the pyramid, condemned to manual professions and forced to serve the castes above
them. According to him, Brahmins were the originators of this unnatural institution founded
and maintained through unnatural means. Brahmin class first raised the structure of caste while
making themselves into caste, the Brahmins by virtue of this, created non-Brahmin caste. The
government of India’s Anthropological Survey of India (ASI), under the leadership of K.S.Singh,
brought out a series of publications titled ‘The People of India’. This project identified 2800
castes including 450 SC, 461 ST and 766 OBC. It concludes that, caste continues to be the basic
building brick of Indian society. This historic verdict of the ASI project did not get any publicity
in India’s press because our ruling class is shy of admitting this fact which has made them the
rulersiii. Dalit Vice editor Mr. V. T. Rajshekar says, “Almost all political party leaders be they
nationalists, socialists, communists and Hindu Nazi have uniform opinion on caste ‘caste is bad
and hence it has to be destroyed; Indian scholars and researchers have produced mountains of
literature to prove that caste is non-existent’. They believed and made others believe that with
economic development, the superficial “caste” could be eradicated. Our planners and rulers,
based on this belief, introduced hundreds of welfare schemes and invested thousands of Cr. of
rupees on these schemes. All these economic programs proved an utter failureiv. What Mr.
Rajshekar says, is true because, caste system is yet exists in India and functions well organized
manner than earlier period. According to Dr. Ambedkar ‘Caste does not result in economic
efficiency, caste can not and has not improved the race, caste has however done one thing, it is
completely disorganized and demoralized the Hindu, He said, the Hindu often complain of the
isolation and exclusiveness of a gang or a clique and blame them for anti-social spirit. But they
conveniently forget that this anti-social spirit is the worst feature of their own caste systemv.
The caste system’s fundamental characteristic of fixed civil, cultural, religious and economic
rights for each caste by birth, with restrictions for change implies forced exclusion of one caste
from the rights of castes. Exclusion in economic spheres such as occupation, education and
labor employment is therefore, internal to the system, and a necessary outcome of its
underlying principles. In the market economy framework, the caste related occupational
immobility would operate through restrictions in various markets such as land, labor, credit,
inputs, and services necessary for any economic activity. Therefore, in our country all major
assets of production are own and concentrated in the hands of upper castes Hindu and lower
strata of society particularly depressed classes (SC/ST) are assets less people. The unnatural
distribution of national wealth forced depressed classes to depend on for their survival on
upper castes Hindu at large extent; this is the main reason for their socio-economic exploitation
in India.
Caste discrimination continues:
Discrimination is the main function of caste system in India. Though the Indian constitution
provides for a slew of preferential schemes designed to end discrimination against the
scheduled castes/ scheduled tribes yet, atrocities against them continue unabated. The
provision in the constitution resolves, ‘to secure to all citizens: justice, social, economic and
political, liberty of thought, expression, belief, faith and worship; equality of status and of
opportunity, and to promote among them all fraternity, assuring the dignity of individual and
unity.’ The constitution also states that ‘the state shall not discriminate against any citizen on
grounds only of religion, race, caste, place and birth or any form’. In the directive principles it
adds that ‘The state shall promote with special care the educational and economic interest of
the scheduled castes/tribes and shall protect them from social injustice and all forms of
In spite of all these provisions discrimination on basis of castes is still continue till to date.
Because, to implementations of provisions made in the constitution are not in the capacity of
depressed castes the political, social and economic powers are vested in the hands of upper
castes Hindus. As upper castes Hindu could control all powers by the virtue of castes system
they do not want to implements the constitutional provisions for their vested interests. Dr.
Babasaheb Ambedkar, the champion of human rights said is true even today, he said that,
“Millions of people living in the midst of civilization are still in a savage state and are leading the
life of hereditary criminals. But the Hindus have never felt ashamed of it. This is a phenomenon
which in my view is quite unparalleled”vi. Thus, biases within the law-enforcement machinery
and the political class have combined to prevent the depressed castes from utilizing programs
designed for them. The statistics speak for themselves. Caste discrimination not only hinders
SC/STs children from attending school but also affect the quality of education they receive.
Therefore, the progress of schooling among Dalit children between the ages of 6-14 has been
low and dropt out rate among them is very high compared to that of the general population.
Several such facts have been revealed in the ‘Indian Education Report’. Upper castes teachers
refuse to touch scheduled castes students. At the same time they make these children special
targets of verbal abuse and physical punishment.vii Such behavior of teachers affects adversely
on the educational desire among the scheduled castes children. According to Dr Babasaheb
Ambedkar the capacity to appreciate merits in a man apart from his caste does not exist in a
Hindu. There is appreciation of virtue but only when the man is a fellow caste-man. It is not a
case of standing by virtue and not standing by vice. It is a case of standing or not standing by
the caste. Have not Hindus committed treason against their country in the interests of their
caste? This is the question raised by Dr. Babasaheb Ambedkar is very much relevant in present
context. When Malegaon blasts accused were brought by police van Hindu people shower
flowers on them. This create the impression that blast by Hindu are welcome but not by
Muslim. Dr. Ambedkar was a social reformer of 20th century he rightly said “Enlightened high
caste Hindus, who did not feel the necessary for agitating for the abolition of caste or had not
the courage to agitate for it”viii. The root of untouchability is the caste system; the root of the
caste system is religion attached to varnashram; and the root of varnashrma is the Brahminical
religion; and the root of the brahminical religion is authoritarianism or political power. Dr
Ambedkar wanted to change the very body of the caste system which would automatically
result in a change in its mind. He proved that deprivation of human rights resulted in
untouchability and casteism. A country of castes is a country of stagnation and
underdevelopment. A by product of the brahminical discourse, the caste system was believed
to be a divine institution till the British period, and despite resistance from the depressed castes
the hegemonization of brahminical culture practice and ritualism has been established through
well designed ideological and political movesix. Dalit bias runs deeper and deeper even in 21st
century, not only among the uneducated people but also even among highly modern educated.
Discrimination at higher level teaching
Thorat committee was appointed by the government to find out the reported discrimination in
India’s most reputed All-India Institute of Medical Sciences (AIIMS) in New Delhi. The report
revealed that, the struggle that SC/ST students face to enter premier institutions of higher
learning seems mild compared to what they have to put up with later. On top of coping with
academic challenges and a totally unfamiliar environment, many dalit students have to deal
with the hostility that comes with being a ‘reserved category student’. Most of the students
complained that teachers were inaccessible and plain indifferent towards them. The committee
found that over a period of time, SC/ST students have moved from their allotted rooms to be
closer to other SC/ST students. The one-month of ragging to which the authorities turn a blind
eye is sheer hell for these students since they are publicly subjected to caste-based questions,
taunts and jeering. Many of the students said they moved because their rooms would be locked
from outside repeatedly while they were in, vulgar abuse would be scrawled on the doors and it
would be made clear that this would stop only if they moved to floors where other SC/ST
students stayed. They also faced social isolation, refusal to share books and notes and
objections to sharing seats in class. As far as SC/ST faculty are concerned, their written
complaints to the committee are of a serious nature, ranging from non-filling of reserved posts
to denial of opportunities to develop better skills and gain further experiencex. Similar
situations were revealed in the IIT Powai, in Mumbai two years back.
Prejudice attitude towards SC/STs students
There are pre-conceived notion about academic caliber of the SC/STs students and hence they
are labeled as ‘academically backward’. Today in college these student identity manipulated as
‘reserved quota’ students. Thus, in spite of academic competence comments like ‘these
reserved chaps will never be as good as us’ are passed. Another issue is the non-admission of
‘merit’ students in the ‘open’ category, despite a central direction that they must be. It is
always thought why enroll an extra low caste student when we already have to admit a certain
number of them? This follows two consequences, it brands a brilliant student as one coming
from the reserved category and it deprives another needy SC/ST student of a seatxi. Their
contribution is not recognized in any area; they are always put in an environment which will
hamper their personal development and performance. Constant attempts are made to destroy
their ‘self’. In educational institutions and even at work places discussions are held on
reservation policy. The major objective of such discussion is not to find out the ideology of the
state behind the measure, but to create hatred among the students and employees in
organizations. The worth of SC/STs is not prized at work place, though they have potentials. No
one can deny that backwardness very substantially arises from lack of access to economic
resources and facilities like quality education and employment opportunities. However, two
aspects are conveniently overlooked by upper castes Hindus.
Lack of political will
The Maharashtra state is known as socially progressive state, political leaders always talk about
social reform on the name Phule, Ambedkar yet Khairlanji massacre happen in Maharashtra
recently on September 29, 2006, four members of the Buddhist Bhotmange family Surekha, her
daughter Priyanka and sons Roshan and Sudhir were killed near their house in Khairlanji in full
public view, by an angry village mob, allegedly out of caste hatred. This story do not end here it
continued very recently in Marathwada region in Bid district two Buddhist college going girls
were half naked paraded by upper castes Hindu people on day light yet accused are not
booked by police. Such is the fate of SC/ST in modern India.
Economic Implication of Caste system:
India is recognized as an economy with a ‘stunning’ but jobless growth’ and a ‘booming
economy with growing gaps’ where the spectacular successes made have not been shared by
all equally. The planning commission has also realized that economic growth has failed to be
sufficiently inclusive, particularly after the mid 1990, it noted in the approach to the eleventh
five year plan. For too many people still lack access to basic services such as health, education
clean drinking water and sanitation facilities without which they cannot be empowered to claim
their share in the benefits of growthxii. Poverty and economic backwardness may be distributed
across caste lines, but there remains a significant difference in the manner in which economic
backwardness affects life chances of individuals belonging to different castes. A poor Brahmin,
Rajput or Bania may be deprived of good education for reasons of poverty, but his or her whole
lifestyle radiates a degree of confidence which a low caste person from an economically well-off
background is hard put to match. In India those who are not in the growth process they are
particularly SC/ST/OBC and Muslims. Dr. Ambedkar said that, in a castes–based society the
choice of occupation was not based on individual preferences or capabilities, but on social
hierarchy for Brahmanism. While some occupations are valued by society, others are devalued
and are considered polluting, impure, and therefore socially degrading. The social stigma of
impurity and pollution attached to occupations such as scavenging and leather-making reduces
the social status of the persons engaged in them. Workers those who are forced into these
occupations on account of their caste origin do not derive job satisfaction and are constantly
prone to aversion, ill will and the desire to in linger. There are many occupations in India which
on account of the fact that they are regarded as degraded by Hindus, provoke those who are
engaged in there is a constant desire to evade and escape from such occupations which arises
solely because of the blighting effect which they produce upon those who follow them owing to
the slight and stigma of caste on them by Hindu religion what efficiency can there be in a
system under which neither men’s hearts nor their minds are in their work, public life in India is
controlled by caste identities.xiii This is the one of the main reasons of low productivity and
production in India. The implication of such tendencies is the results of under utilization of
resources and under production.
Worst condition of unorganized sector’ workers
SC/STs are predominantly working in unorganized sector and their conditions are miserable
there it is reported in various commissions’ reports appointed by the government of India. The
report of the Commission on the condition of unorganized sector workers revealed that, the
number of people below the poverty line may have come down, but 79 per cent of unorganized
workers 88 per cent of SC/ST, 80 per cent of OBC population and 84 per cent of Muslims belong
to the “poor and vulnerable group”. Despite high economic growth in recent years, the report
note, “ They have remained poor at a bare subsistence level without any social security,
working in the most miserable, unhygienic and unlivable conditionsxiv”.
The finding of Kevin Watkins, who edited the United Nation’s Human Development Report, said
that despite growing prosperity brought on by a sustained boom, child malnourishment in India
is higher than Ethiopia and well above the African average of 28 per cent. In India four in every
ten children are malnourished despite the country’s economy growing at an average rate 9 per
cent per year. Report further said, when it comes to economic growth India is a long way ahead
of Bangladesh but when it comes to child survival rates, it lags behind. According to Watkins, an
Oxford academic, Bangladesh has been cutting child deaths at a rate some 50 per cent higher
than in India. Both Bangladesh and Nepal are far poorer than India, but India still has a higher
child death rate then both the nations:’ said Watkins. Poverty has also been falling far more
slowly in India than in other high- growth developing countries, such as Vietnam and Brazil.
Watkins believes that part of the problem is that the benefits of growth have been “highly
skewed’. Secondly from the side of government agencies there is height of negligence’s to
implements the prescribed policies made for SC/ST.
Government Institutes
It is reported in review of the state corporations, the National Institute of Financial
Management (NIFM) in 2006 paints a shocking picture. Most of these agencies have parked
their funds in fixed deposits instead of giving loans to needy SC/ST it’s on an average; their
equity–debt ratio was 65:35. The report says that there is widespread irregularity in selection of
beneficiaries–cases of submitted lists not matching actual recipients have been recorded. Most
state corporations have not prepared accounts for anything between 6 to 16 years. A
Parliamentary Committee looking into the working of NSCFDC found that between 2001 and
2004, only 281 SC/STs artisans had been provided loans in the whole country. Another problem
is declining allocation and even lower utilization. In the past decade, central government
spending on welfare of SC/ST and OBC declined from a tiny 0.005% of the total non- plan
revenue expenditure to 0.004%. Plan expenditure for this purpose declined from 2.4% to 1.6%
over the same period.
Special Component Plan
For raising SC/STs families above poverty line, there is a Special Component Plan (SPC) under
which each central ministry and all state governments are supposed to allocate funds in
proportion to the scheduled castes population. According to the Mid-Term Review of the 10th
five year plan (2002-07) only 14 out of 37 central government ministries had complied with this.
Bank Credits
Bank credits to SC/ST to run their own businesses have also declined. Data from RBI shows the
amount of credit per capita received by SC/ST declined from Rs 495 in 1993 to Rs 285 in 2001
and further to Rs225 in 2004. In fact the number of small borrowable accounts of them
declined from 77 to 23 per thousand.
The Indian system of exclusion on the basis of castes has also been clearly reflected in the
National Sample Survey Organization’s (NSSO) Report (2004-05). It is revealed from the report
that 40.94 % out of total population are OBC, 19.59 % are SC and 8.63 % are STs. Approximately
70 % of Indian population is backward castes population as per Hindu Social Order. The second
important point revealed by report is that, 91.4 percent of STs, 79.8 percent of SCs and 78.0
percent of OBC live in rural areas. The third point is that, the economic growth seems to be
reflecting in the expenditure of urban India, which is spending nearly double the amount on an
average compared to the rural areas. The per capita monthly expenses of people living in urban
areas were Rs. 1052.36 a month as against Rs 558.78 of those in rural areas. With minor
exceptions, the general level of spending of SCs and STs was lower than the OBCs and the
others, while that of the OBCs was lower than that of others. According to the NSSO survey, the
all India average spending by rural STs was the lowest at Rs 426.19, followed by rural SCs at Rs
474.72, OBCs Rs 556.72 and others Rs 685.31. In urban India, STs spent Rs 857.46, SCs 758.38,
OBCs Rs 870.93 and others Rs 1,306.10 in a month on an average.
These are the implications of social exclusion of SC/STs from main stream of development in
our country. As an economic organization caste is therefore, a harmful institution in as much as
it involves the subordination of man’s natural powers and inclinations to the exigencies of social
rules. Economic survey (2005-06) says, if people are healthy, educated and adequately skilled,
they can participate fully and contribute more to economic development process. However,
India’s overall performance on human development has been poor in last decade. Infant
mortality rate have been much slower than expected. There is widespread under nutrition
among women and children and maternal and child health still remains areas of concern.
UNDP’s global Human Development Report (HDR) for 2005 ranks India at 127 out of 177
countries of the world in term of a composite Human Development Index (HDI) for 2003.
Remedial measures
Special Central Assistance (SCA) for the special component plan (SCP) is a major scheme for the
welfare and development of SCs. Under the scheme 100% assistance is extended to supplement
the efforts of the states/ UTs for ensuring rapid socio-economic development of SC specially
those living below the poverty line. Allocation for 2005-06 was Rs 407.36 Cr. for economic
development of these disadvantaged groups through income generating schemes, special
financial institutions have been set up namely scheduled castes finance and development
corporation (NSCFDC) National Safai Karmchari Finance and Development Corporation
(NSKFDC) National Backward Classes Finance and Development Corporation (NBCFDC) and
National Minorities Development and Finance Corporation (NMDFDC) The Protection of Civil
Rights (PCR) Act 1955, and the SC/ST Prevention of Atrocities (POA) Act,1989 are two important
legal instruments to prevent/curb persistent problems of social discrimination, prevalence of
social evils like untouchability and cases of exploitation and atrocities against these
disadvantaged groups. But as I said earlier that, because of prejudice mind set of upper castes
Hindus these tools are not implements in right spirit. The upper castes Hindus always find
different loopholes to avoid the implementation of the Act and therefore, the exclusion of
SC/STs continued.
The Bhopal Declaration
Some of intellectuals among SC/STs and politician, social reformers gather in Bhopal in January
2002 and come with agenda for SC/STs empowerment known as The Bhopal Declaration.
Accordingly, ensure that each SC/STs family will own enough cultivable land for socio-economic
well-being. The law must be amended to ensure that lengthy litigation with the ulterior motive
of denying SC/STs of legal redresses is not resorted to. Enact legislation and enforce the right of
SC/STs, agricultural laborers to living wages, to gender parity in wages, to job security, to better
working conditions and welfare measures, and ensure punitive measures against offenders.
Enforce with stringent measures the Bonded labor system (Abolition) Act, 1976 and abolish
forthwith child labor to ensure freedom with dignity for all the SC/STs Make the reservation
quota applicable in all the public and private educational institutions from primary to technical
and professional levels. Implement effectively in letter and spirit the SC/ST (Prevention of
Atrocities) Act, 1989 and Rules 1995, especially with regard to atrocities against SC/STs women,
and accordingly prosecute the dominant caste leaders and their minions who stoke the fire of
caste clashes and the police officials acting in connivance with them. Ensure that in all state and
national budgets allocations are made as per the proportion of SC/ST population and penal
action taken against not utilization or diversion of funds meant for these sections. The state
must assume sole responsibility in protecting the SC/ST. Make it statutory for parliament and
state Assemblies to debate on the Annual Reports of the National and state level Commissions
for SC/ST and Safai karmcharis within the following year, and ensure that these annual reports
and the action-taken reports of the government are made public. Make reservation mandatory
in the private and corporate sector in the same proportion as in the public sector. These are
some of the suggestions of the Bhopal Declaration. But unless the mind set of upper caste
Hindus changes the implementation of these provisions are not possible.
SC/STs and OBC are in majority in India. They should have their own identity in the Democratic
society like India because of self identity all these depressed castes people can organized
themselves and fight for justice through democratic ways. Dr. Babasaheb Ambedkar has shown
us the path of conversion to Buddhism. All SC/STs and OBC should follow the way shown by Dr.
Babasaheb Ambedkar and embraced. Buddhism will be the identity of depressed castes being
in majority they can have their own government in democratic society and use the political
power to empower themselves and establish the just society based on the principle of liberty,
equality, justice, and fraternity.
I conclude with the words of Dr. Babasaheb Ambedkat that, “turn in any direction you like,
caste is the monster that crosses your path. You cannot have political reform; you cannot have
economic reform, unless you kill this monster”.
i V T Rajshekar, caste a nation within the nation, published by books for change, Bangalore, 2002
ii B. A. W.S Vol 9 p 410
iii V.T.Rajshekar, caste a nation within the nation, published by, Books for change, Bangalore, 2002
iv Ibid
v Annihilation of caste, Dr. Ambedkar reprinted Babasaheb Ambedkar writing and speeches, Vol 1 , published by
government of Maharashtra 1979.
vi Annihilation of Caste, Vol 1, p 52
vii Times of India, February 27, 2002
viii Ibid Vol 1, p 41
ix Kancha Ilaiah, Buffalo Nationalism, published by SAMYA, Kolkata 2004
x Thorat Committee Report, EPW June2, 2007
xi Ramesh Chandra, ‘Identity and Genesis of Caste system in India, Kalpaz publications, Delhi 2005
xii Tilak B. G., EPW, Sept 22, 2007, p 3872
xiii Babasaheb Ambedkar writing and speeches, vol 1,published by Government of Maharashtra, 1979
xiv Times News Network, 11-08-2007

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