Dalits breaking the caste shackles with enterprise

Recent rapid economic growth in India has given them a chance to overcome the old barriers

At school, he took his place on the floor in a portion of the classroom built one step lower than the rest.

Untouchables like him, considered to be spiritually and physically unclean, could not be permitted to pollute their upper-caste neighbours and classmates.

But on a recent afternoon, as Khade’s chauffeur guided his shimmering silver BMW sedan onto that same street in a village in Maharashtra, village leaders rushed to greet him. He paid his respects at the temple, which he paid to rebuild. The untouchable boy had become golden, thanks to the newest god in the Indian pantheon: money.

As the founder of a successful offshore oil-rig engineering firm, Khade is part of a tiny but growing class of millionaires from the Dalit population, the 200 million people who occupy the very lowest rung in Hinduism’s social hierarchy. “I’ve gone from village to palace,” Khade exclaimed, using his favourite phrase to describe his remarkable journey from the son of an illiterate cobbler in the 1960s to a wealthy business partner of Arab sheiks.

The rapid growth that followed the opening of the Indian economy in 1991 has widened the gulf between rich and poor, and some here have begun to blame liberalisation for the rising tide of corruption. But the era of growth has also created something unthinkable a generation ago: a tiny but growing group of wealthy Dalit businesspeople. Some measure their fortunes in hundreds of thousands of dollars, and a handful, like Khade, have started companies worth tens of millions. With their newfound wealth, they have also won a measure of social acceptance.

“This is a golden period for Dalits,” said Chandra Bhan Prasad, a Dalit activist and researcher who has championed capitalism among the Dalits. “Because of the new market economy, material markers are replacing social markers. Dalits can buy rank in the market economy. India is moving from a caste-based to a class-based society, where if you have all the goodies in life and your bank account is booming, you are acceptable.”

Milind Kamble, a Dalit contractor based in the city of Pune in Maharashtra State, said that out of the 100 or so members of the Dalit Indian Chamber of Commerce and Industry in his city, only one was in business before 1931. “We are fighting the caste system with capitalism,” he said.

The Dalits still lag behind the rest of India, but they have experienced gains as the country’s economy has expanded. A recent analysis of government survey data by economists at the University of British Columbia found that the wage premium non-Dalits get has decreased to 21 per cent, down from 36 per cent in 1983, less than the gap between white male and black male workers in the United States. The education gap has been halved.

Another survey conducted by Indian researchers along with professors from the University of Pennsylvania and Harvard showed that the social status of Dalits had risen as well—they are more likely to be invited to non-Dalit weddings, to eat the same foods and wear the same clothes as upper-caste people, and use grooming products like shampoo and bottled hair oil.

Knowledge-based businesses like information technology have attracted large numbers of Brahmins, the traditional learned  caste. The  business castes tended to focus more on retail and wholesale trade than manufacturing. Messy industries like construction are closer to the traditional occupations of the lowest castes.

One Dalit businessman in Pune has turned the traditionally undesirable work of pest control in to a million-dollar company. Kamble made his fortune in India’s building boom. Dalits have started small technology companies, installing networking equipment, while others have set up factories to make water pipes and sugar. “In this complex society, Dalits are turning disadvantage into an advantage,” Prasad said.

Ashok  Khade’s  rags-to-riches story stands out because of how completely he transformed himself, with some luck and some help from India’s opening economy, from an illiterate cobbler's son to a multimillionaire player in the booming oil services industry. He was born in a mud hut in Fed in 1955, one of six children.

His parents were day labourers who toiled in upper-caste farmers’ fields for pennies. His father would often travel to Mumbai, then known as Bombay, to work as a shoe repairman. He came from a family of Chamhars, a subcaste at the very bottom of the Hindu hierarchy. Their traditional job was to skin dead animals.

Few pennies
All through schooling, Ashok Khade endured extreme poverty. Students had to provide their own paper to write their exams, and one day he found himself without even a few pennies to buy the necessary sheets of foolscap.

A teacher tore pages from the attendance ledger. Too poor to buy string to tie the pages together, he used a thorn from a tree. None of it mattered. He graduated near the top of his class. Khade's elder brother, Datta, had managed to get an apprenticeship as a welder at a government-owned ship building company, Mazagon Dock, in Mumbai. He persuaded young Ashok to move to the big city. The tiny room where Datta lived with relatives was already full, so Ashok slept for a time under a nearby staircase on a folding cot.

Khade dreamed of becoming a doctor and studied at a local college. But Datta. who supported the entire family, begged his younger brother to drop out of school and start working. Datta helped Ashok get a job as an apprentice draftsman at Mazagon Dock. What seemed like a setback turned out to be a stroke of luck. His flawless drafting skills and boundless appetite for hard work won him promotions. In 1983, he was sent to Germany to work on a submarine project.

One day he happened to see the pay slip of one of his German colleagues. He earned in one month more than Khade earned in a year. “I thought about my family's needs,” he said. "My sisters needed to get married. I knew I could do better than working for someone else.” When he returned from Germany he began laying the groundwork to start his own company. The risk was enormous, and it was almost unheard of to leave a steady job to start a company. But his two brothers were expert off-shore welders. They had good contacts from their many years at Mazagon Dock.

And India’'s economy was changing after years of stagnation as the 1991 reforms began to reduce the socialist bureaucracy’s control of the economy and stimulate growth. The brothers used their savings to finance the small subcontract jobs they began with, and in 1993 they got their first big order, for some underwater jackets for an offshore oil rig, from Mazagon Dock.

Faster growth
Khade's hunch was right, and his timing was impeccable. Faster growth meant India's appetite for fossil fuels grew ever more rapacious. His company, which builds and refurbishes offshore oil rigs, has expanded rapidly, and he is currently expanding beyond India to the Middle East. He recently signed a deal with a member of the royal family of Abu Dhabi to work on oil wells there, and he is building what will be India’s biggest jetty fabrication yard on the Maharashtra coast, 14 hours by ship from Dubai. He currently has 4,500 employees, and his company is valued at more than $100 million.

Khade probably would not be in business with a prince had he not attended a networking cocktail reception hosted by the Dalit Chamber of Commerce and Industry at the five-star Taj Mahal Hotel in Mumbai earlier this year. There he met the Indian businessman who introduced him to the Arab sheik, who helped him to globalize his company.

These kinds of connections are crucial to the nascent Dalit business community. Because Dalit businessmen often lack the social connections that lead to business ideas, loans and other support, a group of Dalit entrepreneurs created the chamber in 2005. It aims to build those networks so Dalit business leaders can help one another grow. The group has about 1,000 members, all of whom run companies with an annual turnover of at least 1 million rupees. It recently organised a meeting where Dalit businessmen pitched ideas to Tata Motors, one of India’s biggest car companies. Kamble, who attended the meeting, said that of the 10 companies that attended, 4 had signed deals and 4 more were in negotiations.

“There was a time when people like us could not even approach a company like Tata Motors,” Kamble said. “Now we go meet them with dignity, not like beggars. We are job givers, not job seekers.”

The group has persuaded the government to embrace contracting preferences for Dalits like the ones that have helped businesses owned by women and minorities in the United States. It also seeks to persuade private companies to embrace affirmative action policies that would create more jobs and business opportunities for Dalits.

Despite gains for some Dalits, a recent paper from the Harvard Business School on caste and entrepreneurship that used government data from 2005 found that, even after the liberalization of the economy, Dalits were “significantly under-represented in the ownership of private enterprises, and the employment generated by private enterprises.”

Even for those who have had wild success in business, social acceptance has proved harder to attain. While wealth insulates them to some degree from lingering caste prejudice, barriers remain even for rich Dalits.

Even Khade, with all his wealth and newfound status, does not want to offend potential upper-caste clients. His business card reads Ashok K, leaving off the last name that reveals what he is: a Dalit.