Since the early 1990s India's move towards economic reforms and marketization has contributed to its ‘rise’ on the global economic landscape. This ‘rise’ of India is attributed to the adoption of liberalization policies, which are also expected to eliminate discrimination based on caste, religion and gender. Since economic liberalization enhances competition among firms, scholars have argued that more emphasis will be placed on ‘efficiency and skill’ while recruiting a worker rather ‘than the caste of the worker and his loyalty to the firm’ (Panini 1996, 60). This claim is not new. Modernization theorists have long argued that industrialization and urbanization, and the associated ideas of modernity, such as the rationalities of the state, big businesses and planned development will reduce the influence of social institutions such as caste, religion and language (e.g. Srinivas 1969, 270).

In contrast to this view, recent studies have demonstrated that social institutions such as caste and religion continue to play a significant role in the economy, especially in deciding the life chances of individuals (e.g. Thorat and Newman 2010a; Harriss-White 2003). Thorat and Newman's (2010b, 23) study on economic discrimination in the formal urban labour market offers evidence of continued discriminatory barriers for highly qualified Dalits and Muslims. These empirical findings suggest that economic liberalization is not contributing to the dissolution of social institutions such as caste, religion and gender in the labour process.