Caste: The Final-ish Frontier for India’s Economy

Caste has been haunting India since independence. The caste system is intrinsically complicated; it is dependent on ethnicity, marriage, and family ties, but it lacks a clear set of rules. There are hierarchies within hierarchies, grey areas in classification, and even notions that you can change caste. It’s a topic that has birthed new religions, conversions, grassroots movements, and violence.

Time and time again, leaders and voters alike assume that the archaic institution of caste would erode through economic modernisation, and if it doesn’t, that is the fault of the lower-caste. News stories about upper-caste students losing places at top universities to lower-caste students with lower results gain popularity with every admission cycle.  The subsequent rise in calls to end caste reservation and establish India as a true meritocracy has led Dalit voters to lose confidence in the majority party (Guha, 2024). This opinion isn’t fringe or new; the idea that caste discrimination is limited to religion and politics and is not a factor in economics isn’t uncommon, as shown by the 2006 protests against more reservation (Frontline, 2022). Since colonial times, the economy has been considered a public sphere, while caste remains in the private sphere. This is reflected in post-colonial economic policies, as development policies, such as the Sustainable Development Goals, omit caste despite its clear impact on development (Mosse, 2019). 

There are undeniable impacts of caste on economic outcomes. This can be chalked up to clear discrimination and, more commonly, systemic factors. Caste discrimination is still rife: in 2022, the National Crime Records Bureau reported a total of 57,582 cases of hate crimes against Scheduled Castes, reflecting a 13.1% increase from 2021. Hate crime cases against Scheduled Tribes have also increased by 28.8% from 2022 to 2023, reaching 12,960 (National Crime Records Bureau, 2023). Obvious discrimination also occurs in housing, with landlords prioritising those of higher caste status or those in their caste, employment, through who gets hired and promoted, and education, with instances of lower-caste students being barred and bullied out of the classroom, like in the infamous suicide of Darshan Solkani (Godbole, 2025).

However, a more insidious and economically impactful dimension to casteism isn’t violence or straightforward discrimination, but the conditions created by casteism that hold back India’s economy. A significant factor of caste is the community or network it creates. There is an ingroup and an outgroup, which means that opportunity, grace, and trust are maintained within the group above all. Certain castes are known to have certain jobs even in modern times, not because of scripture, but because the business and network are often kept within the caste. By being lower-caste and already suffering from discrimination and a high likelihood of poverty, the lack of network, convinces people of lower-castes to take whatever low-paying job they can get (Munshi, 2019) (Panda, 2025). Even with reservation, the number of upper-caste individuals in lucrative careers and top schools vastly outnumbers lower-caste individuals in a gross distortion of actual population demographics. For example, in top schools like IIT Kharagpur, only 2 out of 101 faculty members were from the scheduled caste/tribe status (Ram, 2024). People from the scheduled castes make up 20% of the Indian population, not 2% (Census Organisation of India, 2011).

The effects of this bottleneck are obvious. Large proportions of the population are under-skilled and underemployed. On top of the monetary demands ( such as extra tutoring and the opportunity cost of studying 12 hours instead of working 12 hours) made to succeed in India’s ‘meritocracy’, caste adds another layer of obstacles, as discrimination of varying levels prevents social mobility for those of a scheduled status (Panda, 2025). It operates similarly to many other forms of inequality, hindering economic development. But in an economy so reliant on cheap labour, does India have enough of an incentive to bring an end to such an oppressive system?

Bibliography 

Census Organisation of India (2011). Scheduled Caste Population in India: Census 2011. [Online]. Census 2011. Available at: https://www.census2011.co.in/scheduled-castes.php [Accessed 30 October 2025]. 

Frontline (2022). 1990: Anti-Mandal agitation and identity politics. [Online]. Frontline. Last updated: 15 August 2022. Available at: https://frontline.thehindu.com/politics/india-at-75-epochal-moments-1990-anti-mandal-agitation-and-identity-politics/article65730863.ece [Accessed 30 October 2025]. 

Godbole, T. (2025). Why India’s top tech universities can’t shake off caste bias. DW. Last updated: 4 May 2025. Available at: https://www.dw.com/en/why-indias-top-tech-universities-cant-shake-off-caste-bias/a-72116876 [Accessed 30 October 2025]. 

Guha, A. (2024). The BJP’s poll showing and Dalit anxiety on reservation. Hindustan Times. [Online]. 25 June 2024. Available at: https://www.hindustantimes.com/opinion/the-bjp-s-poll-showing-and-dalit-anxiety-on-reservation-101719329361969.html [Accessed 30 October 2025]. 

Mosse, D. (2019). The Modernity of Caste and the Market Economy. Modern Asian Studies, 54(4), pp. 1225-1271. Available at: doi:10.10.17/S0026749X19000039.

Munishi, K. (2019). Caste and the Indian Economy. Journal of Economic Literature, 57(4), pp. 781-834. Available at: doi:10.1257/jel.20171307. 

National Crime Records Bureau (2023). Crime in India - 2023. New Delhi: National Crime Records Bureau. [Online]. Available at: https://www.ncrb.gov.in/crime-in-india-year-wise.html?year=2023&keyword= [Accessed 30 October 2025]. 

Panda, D. S. (2025). Economic Disparities and Its Relationship with Caste. International Journal for Multidisciplinary Research. Available at: doi:10.36948/ijfmr.2025.v07i05.56052 [Accessed 30 October 2025]

Ram, A. (2024). When Caste Shadows Dreams: RTI Unveils Educational Bias In ITTs. [Online]. Feminism in India. Last updated: 22 March 2024. Available at: https://feminisminindia.com/2024/03/22/when-caste-shadows-dreams-rti-unveils-educational-bias-in-iits/ [Accessed 30 October 2025].