Nearly 50 Dalit homes were set on fire on Wednesday in Gohana in Sonepat district of Haryana.
Over 1,500 Dalits living in the village fled their houses fearing violence. A Dalit in the village was suspected of being involved in the murder of an upper-caste person last Saturday.
"This is a case of non-performance by the state government. The state administration knew that the tension between the Dalits and the upper castes was building up over last few days but it did not take preventive measures," said Vijay Kumar Malhotra of the Opposition Bharatiya Janata Party.
"Law and order is the responsibility of the Congress-led government and Chief Minister Bhupinder Singh Hooda must take the blame for the incident," he said.
The state government has rushed police and paramilitary forces to the area.