This paper elucidates the historical origins and transformations of India's caste system. Surveying the complex developments over many centuries, it points out that three positions have been taken in this regard. One suggests that the caste one is born into can be transcended within one's lifetime by performing good deeds. The other declares caste to be immutable forever. And, the third says that one can be reborn into a higher caste if one lives a virtuous life. Moving on to the sociopolitical realm, the paper notes how these positions have been used and exploited. The paper then attempts to anchor the existence and purpose of the Hindu caste system in Freud's ideas about group psychology and Klein's proposals of splitting and projective identification. The paper also deploys the large group psychology concepts of Volkan and the culturally nuanced psychoanalytic anthropology of Roland and Kakar. It concludes with delineating some ameliorative strategies for this tragic problem in the otherwise robust democratic society of India.