Police, however, clarified that the incident, which happened late on Monday night, had nothing to do with "cow vigilantism" as suspected.
Chief Minister N Chandrababu Naidu expressed anger over the incident and warned that anyone trying to disturb law and order would be sternly dealt with.
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He directed the DGP to take strong legal action against the culprits.
Chandrababu warned that stern action would be initiated against anyone attacking Dalits.
He directed East Godavari district Collector to take care of the medical expenses of the two injured. He also asked the Collector to immediately give them Rs one lakh each.
The arrested persons belonged to Kamanagaruvu village and were not "gau rakshaks", as suspected, a senior police official from Amalapuram said over phone.
The cow of U Narayana Rao and Gangadhara Rao went missing a couple of days back. As they were searching for their cattle, they found the two Dalits near a burial ground at Sudhapalem village, trying to skin a dead cow.
Suspecting that the two killed the cow, the villagers of Kamanagaruvu allegedly beat them up.
The cow had actually got electrocuted and its owner had engaged the two Dalits for burying it.
The Dalits sustained severe injuries and were admitted to the Amalapuram hospital.
Narayana Rao, Gangadhara Rao and others were today arrested and booked under the SC and ST (Prevention of Atrocities) Act, the police official said.
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