Economics of Caste in India
Keywords:
Caste, economics, labour market, discriminationAbstract
The caste system in India represents one of the most enduring and economically significant forms of social stratification in the world. This paper provides a comprehensive analysis of the economic dimensions of caste, examining its role in labour markets, entrepreneurship, education, and political economy. Drawing on theoretical frameworks from institutional economics and empirical evidence from contemporary India, the paper argues that caste persists as a fundamental structuring force in the Indian economy through multiple channels: discrimination in labour markets, network-based resource allocation, occupational segregation, and the intergenerational transmission of economic advantage. The paper synthesizes findings from recent scholarship to demonstrate that caste-based economic discrimination imposes significant efficiency costs on the Indian economy while creating durable inequalities that affirmative action policies have only partially addressed. The analysis contributes to broader debates about the relationship between cultural institutions and economic development, challenging modernization theories that predict the automatic erosion of traditional social hierarchies with economic growth.
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