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The inauguration of neo-liberal economic reforms in India coincided with a substantial expansion in the scope and coverage of affirmative action provisions. This article offers an explanation of this puzzle. However, while policies of affirmative action per se have not been adversely affected by the economic reforms, weaknesses of implementation persist, as seen in the poor outcomes for Dalits in terms of both public sector employment and poverty statistics. A small section of Dalits have lately begun to view the market as offering opportunities for accelerated advancement and prosperity, and this article assesses the discursive and empirical claims of Dalit entrepreneurship and Dalit capitalism, and its links to past histories of affirmative action.