This research explores the gaps between the policies and practices in relation to Dalit’s education in Nepal. Dalits are lower caste people placed on the bottom in caste hierarchy system and are traditionally known as untouchables. They are socially isolated and educationally deprived group from the state in the past. Considering this fact, the Nepal government has provisioned free education strategy and scholarships supports programmes for all Dalits up to secondary level as positive discrimination following the equity principle. Despite a series of policy supports and the government’s commitments, Dalits’ success in secondary level is quite low. In this context, this research was conducted in three public secondary schools of western part of Nepal. The gaps were explored through interviews, observations and documents analysis. The interviews were made with 20 Dalit students, 8 parents, 6 teachers and 3 policy makers in semi-structured format. In addition, some classroom observations were also made to understand the teaching and learning processes. The major policy documents were analysed to understand the current policy situations and the analysis of interviews and observations helped to explore how existing policies are implementing in the real world. The inductive thematic approach was utilized to systematize the analysis process. The research findings suggests that many policy commitments of the government are found to be rhetorical than real in under-resourced school and government situations. In addition, there are some problems regarding the distribution and utilization of resources allocated to Dalit students. The implementation aspects of existing policies seem to be weak due to inadequate capacity and commitments of the school management. The scholarship supports given to Dalit students are nominal and inadequate to cover the minimum educational expenses. Although the government has been declared the secondary level education is free for all Dalits, schools are using all students as a source of school income and are collecting money from them indirectly in the name of registration fees, examination fees, maintenance fees and so on. Therefore, the free education policy is limited to the paper in real sense. Dichotomise policy provision of education (public/ private) in the country is creating a wide gap between the rich and poor people and may create inequality in education as most of the Dalits fall under poor category. This situation does not support to maintain social cohesion in the country and society in the long-run. However, the principle of positive discrimination has contributed to some extent to develop Dalit inclusion in education.