In a previous article I talked about some obstacles in economic development in the country, and one of those was underdeveloped infrastructure. This means that roads, train tracks, and other means of transportation are not equipped for sufficient transport of goods or resources across the country.
But one other important obstacle for development in India is the caste system, and although it has already been abolished, it remains an important point in Indian culture. The castes are a system of social stratification, and social restrictions in India in which social classes are defined by thousands of endogamous hereditary groups. The four main castes are Brahmans, Princes, Merchants, and Servants. 
According to William A. Havilland, an anthropologist, although the Indian constitution of 1950 abolished the caste system, it is still deeply embedded in the culture, especially in rural India. One particularly important thing that I would like to touch upon is the Dalits, more commonly known in popular terms as the untouchables.
The majority of these people, about 90 percent, live in the rural areas of the country. Economic exploitation still remains their most acute problem; most of the people are either famers or landless laborers. Large numbers of them migrate across the country, and many are in debt, so they are forced to work off those debts as bonded labor, according to a recent study. Despite the fact that this practice was officially abolished in 1976, we still find many cases such as this.
“In these cases a laborer takes a loan from a landlord or moneylender and in return agrees to work for that person until the debt has been repaid. In practice such debts are difficult to repay as interest rates are high and poverty forces the laborer into deeper debt. The debt can then be passed on to the next generation and it is almost impossible to escape the cycle of bondage. In some areas many high-caste landlords pay their Dalit laborers minimum wages in cash or food, or nothing at all”, according to a speech given by Shobha D’Sami, a man from India who spoke at a UN conference for NGOs.
Many of the Dalits move from rural areas to cities, but here in most cases they are forced to live in the slums. According to statistics, more than 8- percent of Dalits do not know how to read or write, because they do not have access to proper schooling.
This is one social reason that could be one of the main problems for the Indian economy. There is development on one hand, but if the country still has problems such as discrimination of people according to caste, this is a sign that the economy has not yet fully developed.
If we look at India’s largest neighbor, and the world’s second largest economy, China, we can see the difference in development. In China, when development reforms first began in the 1970s, there was a principle called “tie fan wan”, which is literally translated as “a metal bowl of rice”. When China first began development reforms, the goal was to make sure that at least each person in the country had a metal bowl of rice to start with. If compared with India, we can already see that this is something that is not being enforced. On the one hand, we do see extensive economic development, but on the other hand, it is just one sided, because India still has enormous social problems to deal with. The fact is, it’s not that China still does not have its own problems to deal with; just perhaps the economic reforms going on in China were more thorough than the ones in India.
Either way, we can see that the India’s economic troubles do have their roots in the social system, and perhaps the best way to stabilize the economy is to start with society.