Dalits constitute one-fifth of the total Indian population and, being located at the bottom of the caste hierarchy, suffer from the acute problem of discrimination and exclusion in every sphere of society. Despite various government affirmative actions and policies, Dalits experience discrimination, which in turn lead to inaccessibility of welfare services among them. Based on the author’s engagement in field work for data collection,1 this article highlights that discrimination in welfare programme is not only caused by favouritism and corruption but also linked to the sociopolitical structure of the state and society. Through a dense analysis of the process of social exclusion in availability, accessibility and affordability of welfare programmes, this article examines the role of the state and society in the context of discrimination against Dalits in welfare programmes. This article deals with discrimination and exclusion of Dalits during the identification of beneficiaries and delivery of the state-sponsored welfare services. It specifically looks into the discriminatory mechanism in welfare programmes, particularly the programmes that are directly linked with poverty eradication and employment. This article uses the lens of social exclusion to examine caste discrimination in welfare programmes.