10 facts about the modern caste system's effect on poverty in India

By Owen Armentrout 

June 19, 2025 

Merchants sit along the roadside hoping to make a sale. Source: Simon Steinberger 

While India’s 1950 constitution has since annulled the official rule of the caste system, the stains of its reign remain embedded within the fabric of Indian society today.  

Historically, the caste system has been a hierarchical institution that allowed for legal discrimination based on one's varna; highest to lowest ranking class as follows: Brahmans, Kshatriyas, Vaishyas, and Shudras. However, outside the four varnas lie the Dalits, those perceived to be of the lowest social status. 

As it stands today, each of these birthright titles has been relabeled and categorized by the Indian government in an attempt to pay social reparation to those who were wronged by this structure. The Brahmans, Kshatriyas, and some Vaishyas have become the Forward Caste; the remaining Vaishyas, as well as the Shudras, are known as the Other Backwards Caste, the Dalits are denoted as the Scheduled Caste, and the government also recognizes tribesmen under the term Scheduled Tribe.  

Although abolished, the cultural ramifications of one's place in the system still reverberate in the present day. Here are ten facts regarding poverty within the modern caste system.  

1. Despite being former heads of the hierarchy, as of 2021, 27% of the Forward Caste has suffered “recent financial hardship” according to a report published by Pew Research Center. Keep in mind that recent financial hardship was defined as not having enough money to pay for necessities such as food, medical care, or housing. According to India’s former Attorney General K.K.Venugopal, 18.2% of the Forward Caste belongs to the Economically Weaker Sections: members of the FC who fall below the poverty line. 

   
   

2. Reparations in India come in the form of “reservation”. Essentially, affirmative action which reserves a percentage of government jobs, college placements, etc., through mandated quotas. Through the central government, the Other Backwards Caste receives 27%, the Scheduled Caste secures 15%, and the Scheduled Tribes get 7.5%, according to India’s Department of Public Enterprises. However, in 2019 India voted to amend Articles 15 and 16 of its constitution to create the EWS, which now receives reservations to the sum of 10%. It should also be noted that each state has its own reservation quotas.  

   
   

3. While reservations do guarantee slots for students pursuing higher education, OBCs are the only group whose enrollment exceeds the government quota. During the 2020-21 academic year, enrollment was pinpointed at 14.2% and 5.8% for SCs and STs, respectively; OBCs clocked in at 35.8%, according to India’s Ministry of Education. 

   
   

4. Tuition costs, living expenses, and even cultural factors can all be held partially accountable for this disparity. Nearly 75% of jobs held by SC’s are either in the agricultural sector or elementary occupations; a little over 75% for STs in the same lines of work, according to the Indian Journal of Labour Economics. 

   
   

5. The Indian government currently operates over 2,000 cash transfer programs, which from 2014-2024 supplied over 900 million low-income citizens with over 34 trillion rupees ($400 billion) over the course of the last decade. Prime Minister Narendra Modi describes it as “New Welfarism”, according to the BBC. This comes to an average of nearly 3,800 rupees per person each year; although, since 110 million farmers received a yearly stipend of 6,000 rupees, the average for the remaining 790 million works out to 4,220 rupees annually. For reference, the average yearly tuition for an engineering student at a government institute is a little more than 39,000 rupees, according to Flame University. Some of these schemes are caste-neutral, while others are caste-specific. 

   
   

6. More than 25% of SC’s make their living as agricultural workers, according to the Indian Journal of Labour Economics. In total, they comprise 16% of the industry’s workforce, although SC households only account for 10.2% of total farmland holdings in India, according to India’s National Statistics Office. 

   
   

7. Manual scavenging (cleaning out septic tanks and sewers by hand) has been banned in India since 1993; however, the mandate has mostly gone unenforced. As of 2021, India’s government claims there are a little over 58,000 scavengers throughout the nation, according to the BBC. A 2022 report by BMJ Global Health indicates that members of the SC fill 95% of these positions. However, it should be mentioned that the social services organization Safai Karmachari Andolan has said there are upwards of 770,000 such workers. 

   
   

8. According to a study published by PLOS One, the mortality rate for children under five is the highest among children of the SC. Furthermore, the discrepancies in women’s education and wealth account for 83% of this gap in deaths between the SC/ST and non-ST/SC population. 

   
   

9. As of 2022, nearly half of all rural households in India do not have access to tap water, according to UNICEF. Moreover, a 2023 study conducted by the Center for Economic Data and Analysis revealed that the most common water source for those belonging to the SC, ST, and OBC was either a handpump or tubewell. Even then, the gap between the percentage of OBC versus SC and ST populations is 8.6%-10% respectively.  

   
   

10. Lastly, in 2021, the United Nations Economic Commission for Europe published a human development report which affirmed that five out of six of India’s multidimensionally poor (lack of education, adequate health services, and poor standard of living) belong to the “lower” castes or tribes. Over half of India’s Scheduled Tribes bear the weight of this distinction.  

Although these various classifications may persist in hindering those belonging to this system, regardless of caste, many Indians live under the same world poverty line of $3.65 a day.  

Millions of Indian citizens continue to struggle, but it remains true that the nation has recently made vast improvements in infrastructure, which have greatly benefited the multitude. The groundwork is being laid for a more equitable future—if India can maintain its traction.