Gandhi considered the social practice of "untouchability" to be a curse and a blot on Hinduism.
He realized that it was one of the main obstructions towards socially reforming and uniting Hindus.
Gandhi himself belonged to one of three upper caste Hindus, curiously defendingthe idea of a caste system by alluding to varna-shrama (division of labour) as its underlying principle. However, he denied that the caste system had any religious basis and held that its true meaning may have been lost by Hindus over thousands of years of abuse and social degradation.
He believed that there was no warrant for untouchability in the scriptures and it was a late and evil accretion, where he referred to the Advaita philosophy to attack untouchability. He said that since all men were part of the same cosmic unity all men were equal and the same. He also said that the idea of untouchability is unacceptable to reason, is contrary to truth and non-violence and, therefore, cannot be considerd to be adhereing to not dharma.
Distressed by untouchability, in the early 1930s Gandhi coined the term 'Harijan' or 'children of God' for the depressed classes. Based on this concern, he started a full-fledged program for the upliftment of the downtrodden. He led by personal example by embracing people from the untouchable castes in his ashrams. He also set up ashrams in Harijan dominated villages, started opening temples for them, made a call to allow them to have equal access with other Hindus to all public institutions including wells, roads, and schools. He also wanted the upper castes to permit Harijans to visit the temples visisted by the upper castees. Gandhi even carried out three hunger strikes to highlight the issue concerning the untouchables.
However, Dr. B.R. Ambedkar, the great leader of the depressed classes publicly disagreed with Gandhi and called the latter's efforts cosmetic charity rather than real radical reform. Gandhi drew the' Poona Pact' between the Congress and Ambedkar and accepted a system where there would be reserved seats for Harijans but not separate electorates.
Gandhi's reform of untouchability suffered from a limitation because he made it the sole responsibility of the upper caste Hindus to fight against it, leaving out the untouchables themselves. The latter, not being involved in the struggle for their own emancipation, had no opportunity to work and fight alongside the Hindus. They did not hold important positions in the Harijan Sevak Sangh and the Congress and were not able to establish an independent and effective organization of their own.
In keeping with Gandhi's concern for the Dalits, the government of India has started various schemes that have especially benefitted the Scheduled Castes, the Scheduled Tribes, and women.
Through the Jan Dhan Yojana, the benefits of formal banking have reached the poorest sections of society. The Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana schemes provide cheap accident and life insurance. The Stand Up India scheme encourages entrepreneurship by giving loans to among SCs, STs, and women. Under the MUDRA scheme, many from the SCs and STs have benefitted by getting collateral-free bank financing for small businesses and have been able to free themselves from the clutches of private moneylenders.