Poverty in Muslim Community: Caste Stratification, Exclusion, and the Cycle of Deprivation

ABSTRACT

This study challenges the common assumption that Muslims in India form a socio‐economically uniform group. It foregrounds the caste hierarchy internal to the community—Ashraf (elite), Ajlaf (backward), and Arzal (Dalit‐equivalent)—and shows that this hierarchy shapes Muslim life chances as strongly as religion‐based discrimination does. The analysis draws on harmonized data from four National Sample Survey rounds (2004–05 to 2020–21), the Periodic Labour Force Survey 2023–24, Census 2011, and preliminary results from the 2025 caste enumeration. Multilevel regression, Oaxaca‐Blinder decomposition, instrumental variable estimation, and a difference‐in‐differences natural experiment are used to establish both descriptive patterns and causal mechanisms. Ashraf Muslims score 71.2 on the Composite Social Mobility Index, close to the Hindu Upper Caste benchmark of 78.4. Pasmanda Arzal communities score 31.8, the lowest of any social group and below Hindu SC/ST communities. The Ashraf–Arzal gap in higher secondary attainment widened from 19.9 to 32.5 percentage points between 2004–05 and 2024–25. Oaxaca‐Blinder decomposition attributes 44%–52% of Pasmanda employment gaps to discrimination. The instrumental variable analysis indicates that Arzal exclusion from Scheduled Caste reservations causally lowers educational attainment by 8.3 percentage points, while the Telangana difference‐in‐differences design shows that access to welfare raises Arzal girls’ school enrolment by 11.2 percentage points. Together, these results are theorized as a Pasmanda poverty trap : a self‐reinforcing cycle of constitutional exclusion, Ashraf elite capture of institutions, labor market discrimination, spatial concentration in under‐resourced districts, and gender‐caste intersectionality. The study supports calls to extend Scheduled Caste status to Dalit Muslims, to introduce sub‐quotas within the OBC framework, and to democratize the governance of Waqf and minority educational institutions. The 2025 caste census data make the urgency of these reforms hard to dispute.