Swamy Dayal thrashed Akash as he suspected that the boy was stealing toffees from his shop in Bijua village yesterday, it said.
The boy was admitted to community health centre where he succumbed to injuries today, police said.
Agitated with the incident the villagers held a demonstration in front of Bijua police outpost and blocked the Lakhimpur-Pallia highway.
Police and administrative police officials rushed to the spot and pacified the agitating villagers.
An FIR has been lodged against the shopkeeper Swamy Dayal in this connection, police said.