Call centre scams highlight woes of India's jobless youth

Long feted as a hub of the global outsourcing industry, India witnessed a high incidence of fake call centre scams being busted in recent months. These scams have flourished because of the many unemployed but trained youth who are hungry for jobs. They often end up being unwilling perpetrators as well as victims of such scams which, at times, can cast their net far and wide.

This is what police in Noida, a suburb of the capital New Delhi, found when they raided as many as eight call centres last month. The centres were running an illegal operation that had potentially defrauded more than 20,000 people, including in the United States and Canada.

They did so by sending fake pop-up messages warning them that their Microsoft operating system had been infected with a malware and later offering to rectify the "problem" for a sum of between US$100 and US$2,000 (between S$136 and S$2,700). The centres falsely represented themselves as Microsoft's support system.

The police have so far arrested 23 people - most of them graduates - who were leading the operation. "The people who ran these centres did so because of the lure of making easy money in a short period of time but they also exploited the high number of educated but unemployed youth from across the country," said Senior Superintendent of Police Ajay Pal Sharma for Gautam Budh Nagar district, where Noida is situated.

Each of these centres had 15 to 20 workers, who were paid as little as $300 per month and had no idea they were part of an elaborate scam. "Most of these workers were engineering or technical graduates," SSP Sharma told The Sunday Times. He said the Noida police had, in the last six months, busted 24 call centres which were offering fake loans, insurance schemes and job plans. "Many more shut down fearing action," he said.

Several similar cases have been reported from Gurugram, another New Delhi suburb, and Mumbai, among other places. An analysis of media coverage between September 2016 and September last year by the Hindustan Times newspaper found 140 job scams were reported from similar centres in 35 Indian cities, with at least 30,000 victims. Researchers from the Stony Brook University in the US last year found 85.4 per cent of the tech support scams they had analysed were based in India.

These centres contact unsuspecting and often desperate jobless youth either as potential employees or victims. Unemployment is a growing problem in India, where around 12 million people enter the workforce annually. A report from the Centre for Monitoring Indian Economy pegged the country's jobless rate at 6.9 per cent in October, the highest in two years.

A report by the Bengaluru-based Azim Premji University in September stated that the unemployment rate among youth and the higher educated had reached 16 per cent in India, a 20-year high. Growth, according to this report, is creating fewer jobs. In the 1970s and 1980s, when GDP growth was about 3 per cent to 4 per cent, annual employment growth was around 2 per cent. Today, even a 10 per cent rise in GDP results in less than 1 per cent increase in employment.

The report's lead author, Dr Amit Basole, who is an associate professor of economics at the university, told The Sunday Times this is because the agricultural sector, which accounts for around 43 per cent of total employment, has not done well enough, pushing many to seek jobs elsewhere. "The 7 to 8 per cent growth headline numbers are just an aggregate number for the whole economy," he said.

"If you were to break this down to sectors, you will notice that agriculture, which is a very large employer, is growing much slower than the average rate of growth in GDP," Dr Basole said. The GDP growth rate for the second quarter of the 2018-19 financial year was 7.1 per cent, while the agricultural sector clocked just 3.8 per cent growth.

"The other sectors that are growing much faster, such as insurance, banking and IT, aren't heavy employers," he added.

He also said value-added growth did not always lead to job creation. Mechanisation in the manufacturing sector, for instance, while accounting for value-added growth, created "fewer and fewer jobs". Another reason for high unemployment among educated youth was that many preferred to remain jobless, at least in the short term, than be underemployed. "They are unlikely to take up a job that we would have taken a generation ago. This creates open unemployment."

The quality of graduates has also been a concern. The India Skills Report 2018, published by the United Nations Development Programme and other partners, found that their employability was just 45.6 per cent. A major reason for this is sub-standard education, particularly in the engineering sector. Barring the few prestigious technology institutes, most engineering colleges, which have churned out more graduates than there are jobs, have been unable to provide quality education that can guarantee employment for their students.

The All India Council for Technical Education has been trying to cut the number of engineering institutions across the country "due to poor demand and falling quality of education". The regulator has said colleges that lack proper infrastructure and have reported less than 30 per cent admissions for the last five consecutive years will have to close. A total of 463 institutes were affected by the move between April 2014 and this March.

A version of this article appeared in the print edition of The Sunday Times on December 09, 2018, with the headline 'Call centre scams highlight woes of India's jobless youth'. Print Edition | Subscribe