I think that there are a couple of characters towards whom immediate attention has to be paid in understanding Narayan's novel.  The first would be Jagan, who is the "vendor of sweets."  His role in the novel is to represent the basic essence between the world of the mundane and the world of the divine.  His pivot to the latter from the former creates the essence of the novel's development and plot characterization.  I would also suggest that Jagan's son, Mali, is significant for he represents part of the impetus that helps to bring on the change that becomes such a part of Jagan's character.  The other characters in the novel fit into the dynamic of Jagan's maturation and sense of development.  Grace, Mali's wife, is a part of this, as she struggles to try to acclimate to a situation that so few can fully grasp, including the characters in the story.  Jagan's cousin and the dye- maker are also significant in how they represent different ends of Jagan's own transformation and maturation.  The presence of these supplemental characters help to create and further the arc of Jagan's development, helping to develop the plot of the novel.