Over the last 20 years, India's rapid economic growth and the expansion of its middle class has had the effect of turning commercial Hindi cinema into a dream factory, full of glossy urban characters, speaking Hinglish, draping themselves in designer labels and hanging out at the mall. Romances and dramas involving wealthy families living in mansions and driving BMWs has been the staple for a generation of aspirational filmgoers who have enjoyed a level of affluence unprecedented in their country's history. It was a phenomenon assisted by Indians overseas, who wanted films that sentimentalised their homeland and elided any of its harsh realities; the box-office receipts were too lucrative to ignore. But now, economic development has brought about a social and cinematic tipping point, with a middle class that is large, bold and fed up enough to confront the political and social problems that beset their country – both in reality and on screen.

A spate of recent movies addressing poverty and corruption is fast becoming a welter, as India's domestic audience demands more realism, and film-makers recognise the commercial and creative potential of grittier material. Last year saw dirty policing dealt with in Dabangg and political gangsterism tackled head-on in Raajneeti. The suicides of indebted farmers and the feeding frenzies that constantly grip India's 24-hour news media were brutally exposed in the brilliant Peepli Live.

This year has already seen Goa's drug culture unveiled in Dum Maro Dum, while two films currently showing here and in India, Aarakshan and Singham,are creating box-office waves while handling issues that are political minefields. Made within the conventional Bollywood model – songs, dance, romance, comedy and action all rolled into one – they deal with corruption and bureaucracy and, in the case of Aarakshan, the perennially difficult matter of caste.

Twenty years ago, a Bollywood film that pit upper and lower castes so blatantly against one another, honestly unpacking the painful baggage of the system and its injustices, would have caused riots. Today, despite the hysterical reaction of politicians who tried to ban it, it has received acclaim and support from all sections of Indian society. India's audiences are more sophisticated than previously thought, and film-makers are keen to tap this new sensibility. This autumn will see the launch of Force, about a policeman who, stymied by corruption and procedures, takes the law into his own hands: India's own Dirty Hari, if you like.

Aarakshan means "reservation", and refers to the quota system that holds 27% of government-assisted higher education places for castes who have been historically oppressed. In a country where a graduate can expect to earn more than 20 times the income of a non-graduate – enough to lift themselves and their entire families out of poverty – education is one of the most contentious issues. While lower castes vehemently defend and wish to expand this route out of the gutter, upper castes resent a process that expects them to achieve ever higher academic scores to receive ever fewer places. And while lower castes have generally fewer resources at their disposal, caste and wealth are by no means always linked: one can be a poor brahmin.

Before speaking to me, Prakash Jha – Aarakshan's director, producer and co-writer – spent the day in court fighting the kneejerk bans imposed on the movie before it was released. All were lifted but for the one imposed in Uttar Pradesh, India's largest state and one particularly mired in caste politics.

"Before, people didn't even want the word 'aarakshan' heard," he says. "The word is so political and highly charged. People were protesting before they had seen it. And the politicians banned it to shore up their vote banks and appease leaders who make fools of their own communities. After people saw it, I got support from people at every level of society. They had never seen anything like it before and were thanking me – leaders of lower castes and upper caste ones. At the ordinary level of society there is great tolerance, but not at the political level."

There is growing social unrest in India over the culture of corruption, which the film addresses with its portrayal of state governors undermining public education in order to reap profits in the private sector, and the government's response to the movie has been consistent with a broader clampdown on anti-corruption campaigners. "Look at what they are doing to Anna Hazare," says Jha, referring to the anti-corruption leader arrested last week. "They are not letting him fast or protest. There is so much insecurity among the political leaders, they have so little faith in themselves, that it makes the government behave in a most illogical manner."

Jha also made Raajneeti, which showed Indian politics to be little more than a mafia war between competing dynasties. "All my films deal with social issues. I try to make them in a mainstream Bollywood context. Design them in a manner that appeals to a popular audience, so they can engage and be interested in them."

Aarakshan and Raajneeti are notable for being set away from the metropolises of Delhi and Mumbai, located instead in Madhya Pradesh – a middle-income state in the middle of India. They eschew the glitz and costumes of city life for a much more honest portrayal of India, albeit within a Bollywood formula. The sets are unglamorous and the outfits much less showy, and the songs and dances are distinctly traditional compared to the stylised MTV-inspired gyrations that dominate the industry. Jha's films look and feel much more like the reality of India than most commercial movies do. "Indian themes with Indian characters are being welcomed back," he says.

The rise of urban multiplexes fragmented Indian cinema, creating a segmented market. Previously, the single-screen Indian cinema required movies that catered to everyone and thus Bollywood was India's social glue – the medium that all Indians had in common. Multiplexes allowed the middle classes to be hived off and catered to exclusively. But there's a move towards a more inclusive cinema more recently, says Vijay Singh, CEO of Fox Star (20th Century Fox's joint venture with India's Star TV). "We're seeing a trend of more and more film-makers making films with national appeal that are issue-based," he says. "The youth are more vocal in India and the media exposes a lot of the corruption. Film-makers are realising the potential of the home market and must address national themes. In the past, people were afraid to speak about these things or thought they were somebody else's problem."

Classics of Bollywood – such as Mother India or Sholay – were rooted in the poverty and vulnerability of ordinary Indian life, and these themes are returning to theatres as they become more prominent in public life. "There's definitely more of an appetite for masala films in India," says Prakash Bakrania, the UK head of distribution for Reliance Entertainment. "People want more of the old Indian cinema. If you look at the corruption element in Indian life, if you look at stories about the Commonwealth games, then these things will inspire film-makers. Films like Aarakshan and Singham show how we as citizens give in to corruption by giving people money. These are India-specific themes. And they are handled within a masala context. A very obvious good-versus-evil story with songs, comedy, action and romance to make it more palatable."

A scene such as the pivotal one in Aarakshan, in which two student friends from opposite ends of the caste spectrum fall out and lay their feelings bare, has been sadly lacking for a long time, but it works because it offers no easy interpretation. "It's a balanced view," says Jha. "It speaks about the pain on both sides. People should feel the pain of every section of society. It's a cathartic scene that lets out all the pain boiling inside. Indians are mature enough to deal with it."

For all the problems, it is immensely encouraging that these films are being made. "That's the freedom we enjoy here," says Jha. "We can say what we want to say and make what we want to make. There will be opposition, but we can make ourselves heard."