KATHMANDU - Upper caste bullies who beat up a young boy, last week, for daring to enter a Hindu temple in Nepal's northwestern Lamjung district found themselves arrested - but only on the intervention of human rights activists. Another ''untouchable'' in the nearby Nuwakot area was not so lucky. Bire Sarki was not only beaten up mercilessly but police have not been able to trace him for over a week now. Such oppressive incidents are not rare in this backward Himalayan kingdom sandwiched between India and China - it is just that they are being reported with increasing frequency in the press. Armed with new-found freedom the press has been laying bare the hollowness of ''national unity'' as espoused by the previous autocratic government - replaced 10 years ago by multi-party democracy. Now, many dalits, as the untouchable class is called here (and in neighboring India), want to break out from the shackles of rigid Hinduism. They are demanding an end to discrimination, and warn that their movement could turn violent. ''We have been oppressed for a long time by the so-called upper castes,'' says Ram Sunuwar, a dalit who is active in the movement in Kathmandu. ''We simply want equality and justice.'' But that is easier said than done. Nepal is unique in being the world's only country which has Hinduism for its state religion, a faith which stratifies society into castes. Many of Nepal's nearly 23 million people take pride in being Hindu in spite of the rigid caste barriers that form the ugly side of the world's oldest religion. According to statistics provided by well known ethnologist and social researcher Harka Gurung Nepal's dalits number an astounding 5 million or more than 20 percent of its population. But so abjectly dependent have the dalits been that they have been unable to overcome divisions among themselves and translate their numbers into anything like social upliftment. ''Dalits in Nepal are a divided lot,'' explains Kosmos Biswokarma, one of the few dalit journalists active on the Nepali media scene today. ''They have been exploited and oppressed down the ages and even now many of them are divided because political parties continue to divide them.'' It is easy to believe Biswokarma. The governing Nepali Congress party in Nepal has four dalit organizations in its fold - all competing with each other. The main opposition communists patronize three other groups, and there are several more associated with other political parties. While it is tempting to lay blame entirely on Hindu obscurantism, experts point to other factors such as Nepal's dismally low levels of illiteracy and poverty for the perpetuation deep social inequalities. Another reasons is the poor visibility of the caste phenomenon because the worst cases of discrimination occur largely in the remote hill and border districts rathern in urban centers. At the official level, Nepal has tried to clamp down on discrimination. In 1965, the late King Mahendra decreed that dalits should not be discriminated against, but stopped short of prescribing penalties for perpetrators. It was not until the arrival of democracy in 1990 and a new constitution that social discrimination could be made punishable. ''That was, and still is, the most significant anti-discrimination step taken by the state,'' Biswokarma said. Having a law is one thing, but practicing it is quite another as the dalits have discovered. Experts who have studied the problem say dalits have too little faith in the establishment to use the law against discrimination. That much was evident from last week's incidents in Nuwakot and Lamjung. Instead of the aggrieved parties lodging official complaints with the administration, human rights activists had to step in. ''Dalits need to be more forceful in their movement,'' says Kapil Shrestha, a prominent human rights activist and president of Human Rights Organizations of Nepal. ''They need to use the available laws and pressure for more pro-dalit legislation to have an impact. After all, they have the strength of numbers.'' Biswokarma, on the other hand, feels that such tactics would work only in the distant future. For short-term progress dalits need to pressure the ruling classes into affirmative action. ''I am not talking about reservations per se, but there ought to be some concessions given to dalits for better representation and opportunities.'' In neighboring India, which is officially secular, dalits and tribals have constituencies reserved for them, as are jobs and opportunities in government-run institutions. While discrimination and oppression of dalits is still a problem in India, the policy of reservations has undoubtedly improved their lot. Similar affirmative action would clearly be welcomed by Nepal's dalits. Presently, of Nepal's 300-odd legislators in the two houses of parliament, only three are dalits, and they are nominated members of the upper house.