POLITICS in India is more sectarian and caste-based today than 60 years ago, but economic development and the private sector can help break down these social barriers, Finance Minister Tharman Shanmugaratnam said on Monday.

He was speaking at the Fourth International Conference on South Asia in Singapore about the challenges of unequal development and chronic poverty in India despite its strong economic growth.

'In India you don't cast your vote, but you vote your caste,' Mr Tharman said, citing a Financial Times journalist, drilling home the point that social barriers at the political level continue to constrain the economic and social development in India, especially for the poorest.

As India's rich-list grew over the last decade with three of its tycoons making it to Forbe's 2007 top 10 richest list, the benefits of India's growth have not trickled down as fast.

One quarter of India's population still lives below the poverty line, according to the latest report by the World Economic Forum.

Nevertheless, Mr Tharman argued that the caste barriers in India is dissolving in its own way. Through migration from rural villages to the cities, these social barriers slowly come undone.

'On the factory floor...everyone is equal on the production line regardless of your social background,' Mr Tharman said.