‘Untouchables’ of India: Here’s why the country’s most vilified caste is on the verge of a breakthrough

What unites Nilam G, a 23-year-old entrepreneur based in a Mumbai slum, and billionaire Ashok Khade? They are Dalits, belonging to communities that occupy the lowest rung of India’s complex, discriminatory, and historically oppressive structure based on lineage and occupation. 

For centuries known as ‘untouchables’ or ‘outcastes’, the colonial British administration categorized them under the term ‘depressed classes’ and then ‘scheduled castes’. Dalits were consigned to professions such as cleaning human waste and handling of corpses, making them ‘impure’ and hence ‘untouchable’.

Consequently, for centuries, no one above them in the caste hierarchy allowed Dalits any physical proximity (Brahmins atop the caste pyramid took a bath even if a Dalit shadow inadvertently fell upon their feet). They were denied entry to residences, shelter homes, temples, and public spaces like markets; their children were prevented from playing with or marrying higher castes; Dalits were not even allowed to sit in the front of the classroom, and even today, they are physically or verbally humiliated in India’s elite institutions of higher education. 

Dalits found it difficult to challenge India’s rigid caste hierarchies, even after the adoption of a constitution (written by a Dalit) after independence in 1947. In recent years, however, they have done so by, among other things, foraying into entrepreneurship. More than 680,000 micro, small, and medium enterprises are now run by scheduled castes and tribes, though still only around 7% of the total. According to Dalit political leaders, at least some of this growth represents an acknowledgement among the scheduled castes that Dalit entrepreneurs alone can ensure better job prospects for Dalits, particularly in the booming small and medium segment of businesses.

Unwittingly, Nilam G adopted one of the Dalit Indian Chamber of Commerce and Industry’s (DICCI) central guiding principles – to turn the historically underrepresented castes into “job-givers, not job-seekers.”

In the weeks before Diwali, a handful of the cramped homes in the suburban Mumbai slum of Jagruti Nagar were lined with hundreds of freshly hand-painted ‘diyas’, little oil-and-wick lamps made of clay, waiting to be packed and dispatched to buyers.

It was one of the many entrepreneurial initiatives that Nilam attempted since completing her post-graduation in 2022. As with her previous ventures, it focused on the collective labor of a group of young women in the slum colony, many belonging to Dalit families like Nilam’s. 

“We’ve tried selling homemade chocolates, and for Christmas we’re researching how to make candles,” Nilam said, “but we don’t know where to find advice or information on how to grow our business.” Nilam had stumbled very early on a major roadblock for Dalit enterprise. 

“A lack of information, whether about government schemes or about working capital, credit, banking, marketing, etc., has remained the biggest problem in forging more success stories of entrepreneurship by the lower castes,” said Kavita Dambhare, a resident of Nagpur in the western state of Maharashtra and founder of Flight India, a non-profit that has in the course of 25 years generated agro-based enterprises for nearly 80,000 beneficiaries.  

Crushing poverty is what Dambhare remembers most clearly about her childhood. She spent after-school hours collecting fodder for the family’s milk-producing animals, walking to deliver milk to buyers or caring for the animals, looking to support her father, a rickshaw-puller. When it was time for her to look for a job, she realized there were tens of thousands of aspirants for every available job.

“If I progressed alone, this would be no progress,” she said. “I decided to dedicate myself to creating livelihood and entrepreneurial opportunities for Dalit and Adivasi [indigenous] women in rural India.”     

From assessing what ventures were most likely to succeed in different clusters of villages to drafting loan applications, assisting with banking procedures, government compliances and training or skilling of Dalit women entrepreneurs, Dambhare has a lengthy handholding process for each case she takes up.

Most of the thousands of Dalit entrepreneurs she assisted are suppliers of dairy products, poultry farm owners, goat-rearers; others run food products businesses selling homemade pickles or packaged snacks. Most work through self-help groups or collectives, and agriculture-allied industries tend to have the most fail-safes, Dambhare said.

Discrimination, however, continues to be an impediment. Many in India still refuse to buy from a Dalit, for fear of a transmission of ‘impurity’.

“Whether rural women entrepreneurs make products traditional to their caste occupation or something new, buyers continue to be from the local power elite, and this means we continue to be, in a way, dependent on them,” she said. 

The skewed caste-based power dynamics of such a market enable upper caste buyers to routinely negotiate rock-bottom rates for such products. “Product promotion and accessing wider markets is a huge challenge for Dalit entrepreneurs,” Dambhare said. “This challenge is so insurmountable that it’s hard to put into words.”

Collectives that function as businesses, however, have been successful, she said, narrating an incident from 2000 when she was coordinating the formation of dozens of rural women’s small savings groups deep in forested belts along the border of Maharashtra and Madhya Pradesh. 

For years, tribal women had sold the seasonal mahua flower, a small, fragrant bloom from the Mahua tree (Madhuca longifolia), for 2 rupees ($0.024) a kilo. Revered for its cultural and economic significance, dried and fermented mahua flowers are used to produce a traditional alcoholic drink, besides having other medicinal and culinary uses. “By simply assembling the women into self-help groups and storing this summertime forest produce for a few months raised their negotiating power, and we got 8 rupees [$0.096] per kilo from the traders that first year,” she said.      

Dambhare’s latest initiative is to draw Dalits into the soil-testing business, a flourishing space as agrarian communities turn to organic and natural farming to counter climate change. “We’ve processed loan applications and other documentation for 50 prospective soil-testing labs,” she said, “and 80% of these applicants are Dalits.” The applications are expected to be approved within weeks. 

In the towns, entrepreneurs she helped to build now run flour mills, small stores, tailoring units, incense-making units, etc.

Another Nagpur resident, Prithviraj Borkar, 50, is preparing for his annual trip to Mumbai on December 6, observed by Dalits as Dr. Babasaheb Ambedkar’s ‘Mahaparinirvan Din’ or his death anniversary. Born a Dalit, Ambedkar, the chief architect of the Constitution of India, converted to Buddhism in 1956, publicly rejecting Hinduism’s caste-based oppression. Every year, nearly 500,000 Dalits flock to Mumbai on December 6 to visit the site of Ambedkar’s cremation, and to browse through hundreds of stalls. 

Borkar, who set up Shakyamuni Tours & Travels Ltd in 2010, has had a stall there for the last few years, posters on its facade announcing international and domestic tours specially designed for Dalit travelers, to Buddhist destinations in the far East and in Sri Lanka, for example, all at affordable prices for Dalit families, many of his customers first-time fliers.      

“My business is not for profit alone,” Borkar said, when asked about his credo for success. “There is a social aspect to this work. I want Dalits to be able to travel, to see the world, and to understand why Ambedkar embraced Buddhism.”             

Entrepreneurship for Dalits is a double-edged sword, he reasoned, offering freedom from discrimination by employers, but also, equally, limited marketplaces where non-Dalit buyers may be rare. Borkar conceded that his revenues are stable because his offerings are carefully designed for his all-Dalit clientele, the emphasis on affordability and their cultural identity.      

Despite these stumbling blocks, there has never been a time as bright as now for Dalits to take up entrepreneurship, said Raja Nayak, national vice president of the DICCI, whose various businesses in the food industry, construction, and logistics sectors rake in an annual revenue of 600 million rupees ($7.1 million).

“There is an ocean of opportunities and government policies to take advantage of,” the Bengaluru-based Nayak said. He cites the example of the southern state of Karnataka, where there is a 75% subsidy on land for Dalits setting up industries. 

The DICCI has worked closely with the government of India to design some excellent policies to promote Dalit enterprise, said Nayak, whose own entrepreneurial journey began in the 1990s when, as a 17-year-old, he sold shirts on a sidewalk, export-reject items from factories in southern India’s textile hubs.

“The Stand-Up India programme offered by the ministry of finance is DICCI’s baby, it offers loans up to 10 million rupees [$118,400], without any guarantees, to scheduled caste or scheduled tribe entrepreneurs from any nationalized bank.” This was in stark contrast to the 1980s and 1990s when finance was the biggest roadblock for young Dalits setting out to open a business. 

Nayak, who is looking to venture into Russia where he says opportunities abound, said prospective Dalit businesspeople must fan a fire in their belly, tap into the opportunities made available by the state and central governments, and work hard. “The world is open for business,” Nayak said.     

The government also established the National Scheduled Caste/ Scheduled Tribe Hub (NSSH) scheme with an aim to improve market access and ensure greater participation of scheduled caste entrepreneurs in public procurement, by encouraging Dalit businesses to turn vendors for larger firms and public companies. 

Between 2020 and 2023, the Ministry of Micro, Small, and Medium Enterprises of the government of India released over 4.35 billion rupees ($51.5 million) for the scheme, to work on entrepreneur development, to include the service sector under a special credit-linked capital subsidy scheme, build social media strategies for effective outreach, and to constitute a cell to assist Dalit entrepreneurs in participating in government tenders, exhibitions, etc. Fifteen decentralized offices of the NSSH work from the big cities and Tier 2 towns to provide support to Dalit-owned enterprises in tender participation, credit facilitation, enrollment in government schemes, registrations, and compliances, etc. 

None of these will really empower Dalit entrepreneurs, said Chandra Bhan Prasad, a prominent Dalit thinker and writer, also affiliated scholar at the Mercatus Center at George Mason University in the US. 

“No policy has helped Dalit entrepreneurs except the economic reforms of the Nineties, dismantling the Inspector Raj by doing away with the license requirements, a system controlled by upper castes,” Prasad said. The reforms led to many companies outsourcing elements of their work, leading to a large number of Dalits becoming vendors for bigger companies or public companies, he said. “It was not an intended consequence.”

Unfortunately, policy-makers remain unaware of what really impedes Dalit enterprise, said Prasad, who was also editor of the Dalit Enterprise magazine, which folded during the Covid-19 pandemic as support from Dalit businesses dried up. The current government has disbursed loans worth nearly 3 billion rupees ($35.5 million) through various schemes for Dalit enterprises, he said, but in the absence of access to the market, many of these creditors become defaulters. 

“Dalits are not asking for money, they are asking for a market,” he said, explaining that Dalit businessmen tend to be less educated than upper caste peers, less likely to be polished or well-connected. First generation Dalit entrepreneurs are particularly vulnerable to failure on account of not being able to access a fair and non-discriminatory market, he said.          

Among the smattering of Dalit entrepreneurs who have become billionaires or are headed there is Ashok Khade, managing director of DAS Offshore Engineering Pvt Ltd, a 5-billion-rupee ($60 million) engineering and construction company for sectors such as upstream/downstream hydrocarbons, water supply, and infrastructure. 

The son of a cobbler, Khade described a childhood in extreme poverty in Maharashtra’s Sangli district, followed by years of struggle in Mumbai where he pursued higher education, sleeping under the staircase of a residential building because he could not afford rent. 

Khade later took up training and employment at the Mazagon Dock Ltd before setting up DAS Offshore in the early 1990s, named after brothers Datta, Ashok, and Suresh who all worked at the dockyard. Suresh Khade went on to become a minister in the Maharashtra state government in 2022-24. 

One maxim that served him well, Khade said, was to view his 4,500 employees’ growth as a measure of the company’s success. “It doesn’t matter that I have BMWs today, I must remember the times when I took the train or bus,” he said, “that keeps me connected to my people and my roots, and that is what our real asset is.” To prospective Dalit entrepreneurs, his advice is to pursue higher education. “And work with long-term goals in mind.