Wednesday, December 21, 2011

[ZESTCaste] Scaling Caste Walls With Capitalism’s Ladders in India

December 21, 2011
Scaling Caste Walls With Capitalism's Ladders in India

PED, India — On his barefoot trudge to school decades ago, a young
Ashok Khade passed inescapable reminders of what he was: the well from
which he was not allowed to drink; the temple where he was not
permitted to worship. At school, he took his place on the floor in a
part of the classroom built a step lower than the rest. Untouchables
like him, considered to be spiritually and physically unclean, could
not be permitted to pollute their upper-caste neighbors and

But on a recent afternoon, as Mr. Khade's chauffeur guided his
shimmering silver BMW sedan onto that same street in a village in the
southern state of 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 company,
Mr. Khade is part of a tiny but growing class of millionaires from the
Dalit population, the 200 million so-called untouchables who occupy
the very lowest rung in Hinduism's social hierarchy.

"I've gone from village to palace," Mr. Khade exclaimed, using his
favorite phrase to describe his remarkable journey from the son of an
illiterate cobbler in the 1960s to a wealthy business partner of Arab

The rapid growth that followed the opening of India's economy in 1991
has widened the gulf between rich and poor, and some here have begun
to blame liberalization 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 business people.

Some measure their fortunes in hundreds of thousands of dollars, and a
handful, like Mr. Khade, have started companies worth tens of
millions. With their new wealth they have also won a measure of social

"This is a golden period for Dalits," said Chandra Bhan Prasad, a
Dalit activist and researcher who has championed capitalism among the
untouchables. "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 1991.

"We are fighting the caste system with capitalism," he said.

An Immobile Society

Bollywood may love a rags-to-riches story, but historically India is
not a nation of Horatio Alger stories. Social and economic mobility
are limited, a product of India's layers of cultural legacies: the
Hindu caste system, the feudal hierarchies established by its many
invaders and the imperial bureaucracy imposed by Britain. The idea
that with hard work and determination, anyone could succeed found
scant purchase here.

Independence changed that somewhat. India's Constitution, which was
largely drafted by a Dalit, Bhimrao Ambedkar, outlawed the practice of
physical untouchability, which relegated Dalits to the bottom of the
social ladder and condemned them to low-status jobs, like leather work
and barbering.

It established affirmative action for Dalits and tribal people in
politics and government jobs and education. The practice of physical
untouchability, which prevented Dalits from walking on the same
streets as upper-caste people, drinking from the same wells or even
looking such people in the eye, has virtually disappeared, though it
remains in practice in some remote areas.

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 gap between other castes and Dalits has
decreased to 21 percent, down from 36 percent 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 has 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.

For most of India's history after independence, the government was the
only thing that could improve the Dalits' lot. For nearly all Indians
but especially for Dalits, a government job, even a low-level one, was
the surest ticket out of poverty, guaranteeing education, housing, a
salary and a pension. Few in the socialist government or in India's
generally risk-averse society saw entrepreneurship as an attractive

But that has started to change. Since 1991, when India's economy
opened to the world and began its astonishing growth trajectory,
hundreds of thousands of new businesses have been created, leaving an
opening for millions of people who never imagined that owning their
own business was even possible. A small handful of Dalits were
uniquely poised to take advantage.

Caste is a delicate subject in Indian life, spoken of only sotto voce.
The once strong connection between caste and occupation loosened long
ago, and generalizations are risky, but certain cultural affinities

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 into a million-dollar company. Mr. 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," Mr. Prasad said.

Starting From Nothing

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 Ped in 1955, one of six children. His
parents were day laborers 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 caste at the very bottom of the Hindu hierarchy. Their
traditional job was to skin dead animals.

They were poor and always hungry. One day, his mother sent him to
fetch a small bag of flour on credit from a nearby flour mill so she
could cook flatbread for dinner. But it was the monsoon season and
Ashok slipped in the mud. The precious flour landed in a puddle.

"I came home weeping," he said. "My mother was weeping. My brothers
and sisters were hungry. There was nothing in the house."

But that hunger gave him drive. "That was my starting day," he said.

Mr. Khade got his first big break that year, when he won admission to
a school run by a charity in a nearby town. Away from the village and
its deeper caste prejudice, he thrived. Upper-caste teachers nurtured
him, and he strived to impress them.

But caste was not entirely absent. In the school's musty register from
1973, the year he finished high school, next to his name is his caste:

All through school, poverty gnawed at him. 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.

Setbacks and Luck

Mr. 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.

Mr. 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

One day, he saw the pay slip of one of his German colleagues, who
earned in one month more than Mr. 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 offshore welders. They had good contacts from their years at
Mazagon Dock.

And the economy was changing after years of stagnation as the 1991
reforms began to reduce the bureaucracy's control of the economy and
stimulate growth. "It was obvious there was a chance to make a lot of
money," he said.

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.

Mr. 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 expanding 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. He has 4,500
employees, and his company is valued at more than $100 million.

His two brothers are now in politics — one leads the Ped village
council, the other is a member of the state assembly, both holding
seats reserved for Dalits. Mr. Khade has bought vast tracts of land
around his village, the same plots where his mother, now 86, used to
work for upper-caste farmers for pennies a day. Now she dresses in
expensive silk saris, rides in a chauffeured car and wears gold
jewelry. The sons of upper-caste families now work for Mr. Khade's
company. By any measure he is a man who has made it, and big.

"An untouchable boy the business partner of a prince?" Mr. Khade said.
"Who would believe that is possible?"

Mr. 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
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 $20,000.

It recently organized a meeting where Dalit businessmen pitched ideas
to Tata Motors, one of India's biggest car companies. Mr. Kamble, the
Dalit contractor, 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," he
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.

Few Options for Women

Despite the success of men like Mr. Khade, a Dalit entrepreneur is
still much more likely to be a poor woman who has no choice but to
start a small, low-profit margin business because so few other options
are open to her, said Annie Namala, a researcher and activist who has
worked on Dalit issues. A survey completed this year of Dalit women
entrepreneurs in Delhi and Hyderabad found that most made less than
$100 a month from their businesses.

"These are basically survival enterprises," Ms. Namala said. "These
women would prefer a steady job, but no jobs are available so they
start a small business and work very hard with very little return."

Despite gains for some Dalits, a recent paper from the Harvard
Business School that used government data from 2005 found that even
after the economic liberalization, Dalits "were significantly
underrepresented 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.

Names often reveal a person's caste, so one Dalit businessman who
installs solar water heaters changed his last name because he worried
that upper-caste people would not want a Dalit installing an appliance
associated with personal hygiene in their homes.

Even Mr. 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.

Hari Kumar contributed reporting.


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