Caste system is not just reservations/backward communities. It includes the different sub-castes (Ex - Different sub-castes in the Brahmin caste). This is very relevant in vote bank politics. A candidate belonging to sub-caste X will not get elected if the region has majority people from sub-caste Y, even if the candidate is known to be capable.
The main reason for the terrible infrastructure conditions in India is politics and corruption. These are strongly rooted in the caste/sub-caste system. Money has always been flowing freely in politics and it is what makes politics attractive.
The terrible infrastructure I refer to is basic - water, electricity, medicines. Malls, fancy cars cannot substitute water. In India, People are dying for water these days. This will only increase exponentially. There has been research showing that 24 hour water supply is possible with the current fresh water resources in India, but it won't happen, thanks to politics, corruption and the caste system.
The SUV situation brought up in the article is not caste based. It was money based and money is the new, bonus caste system on top of existing ones.
Caste system is a option, you can either associate yourself to it or leave it. This is true at least in modern day India and has been the the case for nearly 20 years now. You can easily ditch your caste, just like atheists ditch their religion.
The fact is caste system offers a comfortable cushion of victim hood and gives you enough reasons to justify failure or even not trying.
These days belonging to a lower caste is a gift because you get reservations nearly every where. There are protests by many communities to include them in back ward communities because of the reservations. People are fighting to be backward, Read: http://en.wikipedia.org/wiki/2008_Gurjar_unrest_in_Rajasthan
The situation is such that people want to belong to backward communities and castes.
True freedom is dangerous, many people know it, and they don't even want it.