The dowry system is so deeply rooted in Indian culture, that sometimes one feels that there's going to be no way out - at least not for another century.
Even modern, well-educated families start saving up money for their daughter's dowry as soon as she is born, so what can one expect from the uneducated masses, whose only form of education is tradition?
When demands for dowry are not met, the bride is subject to torture, and often even killed. The reason many parents don't want to have daughters is because of the dowry they will have to shell out at her marriage, and the stress they go through due to never ending demands from her in-laws.
Dowry is an evil, evil system and all of us, at some level, condone it and even contribute to it.
Often the boys parents don't demand dowry, but our culture is such that we feel we must give something to the in-laws. In such cases, give as much as you receive. When you go out of your way because you are the parents of the girl, you are contributing to this evil.
Come festivals like Diwali or Holi, and the parents of the daughter flood her in-laws with gifts. If gifts are expected - your daughter is married into the wrong family. If such giving is self-inflicted, you're making a mistake. Give a token present to your daughter. If you want to give her something more, do so, but don't feel pressured to give anything more than you receive to her in-laws. You don't need to if your daughter is happily married and has a supportive husband - so DON'T.
Educate your daughters
An astounding number of parents still don't lay enough emphasis on educating their daughters. They believe their daughters will get married eventually, and husbands will support them, so why push them so hard? Poorer sections of society would rather send their daughters out to work and earn some money, to help them save up for her dowry. Those from regular middle and upper class backgrounds do send their daughters to school, but don't emphasise career options. They view education as a rite of passage. If their daughters do well, it's something to brag about at kitty parties.
Similarly, very wealthy parents will happily support their daughters until they get married. Because of the family status and their ability to fork out a high dowry, they know they will get good matches for their daughter, and don't take their daughters education very seriously.
Get serious about your daughter's education. Encourage her to have a career of her own, no matter what your financial standing. One of the reasons parents of the boy ask for dowry, is that they often expect that their son will be earning and supporting the wife, and it is only fair that she contribute somewhat towards the household by way of dowry. If your daughter is educated and has as good a career as her husband to be, you've got a strong step in your favour.
Instead of giving her dowry so everyone is nice to her at her new home, give her a great career, so they can't help but respect her. So if they treat her badly, she can walk out, as she is not dependent on them.
So they need her monthly contribution to the household expenses and dare not mess with her.
Providing your daughter with a solid education, and encouraging her to pursue a career of her choice is the best dowry any parent can ever give their daughter.