Shastri was speaking at an event organised by Jawaharlal Nehru University (JNU) on the 61st death anniversary of B R Ambedkar.
Many of the 6,500 castes and 50,000 sub-castes in India did not exist until the 12th century, he claimed.
Communities that belong to one of the four varnas in Hinduism are called savarnas.
"In his book 'Who Were the Shudras', Ambedkar said Dalits of the era are not the Shudras of the ancient or Vedic era, and that they have no association with the Shudras either... Today we see many people saying that in Hindu religion, Shudras were treated poorly.
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He said that Ambedkar had quoted professor M A Sherring of the Oxford University who said today's Dalits were most probably Brahmins and Kshatriyas during an earlier period.
"Everybody knows that Ambedkar burnt the 'Manusmriti' but do people know that he also gave a written clean chit to Manu? In his book 'The Untouchables', he wrote that there was no untouchability in the Manu era," said Shastri.
"Manu codified the system which was in place for long before him in which there was graded inequality. To say that untouchability and caste system came into practice in the 11th century will perhaps not be the truth," he said.
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