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Updated: November 22, 2011 18:01 IST

When Dreams Turn Into Nightmares

Arun Ramachandran
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The Indian IT sector was once hailed as the big Indian dream, a pathway to glory for many a middle class youth. We used to hear stories of first generation IT employees having monthly salaries more than what their middle-class income parent was earning, right from the first day at office.

But IT has been a pathway to doom for some. Fears of recession, lay-offs, big scams, bubbles, currency volatility, etc have taken the IT industry for a ride at various points of time.

One such dark side has been the story of Job for Money scams. Understanding the economic reason behind these scams could have been an excellent case study for Levitt and Dubner, authors of Freakonomics, who go about finding the economic reasons behind naming of children and the role of legalized abortions in reducing crime.

Here is an attempt to find out the economics behind the Job for Money scams in the IT industry. The sudden boom in the IT offshoring sector in India at the turn of the century resulted in a supply-demand gap, with the supply of skilled professionals not able to match the high demand for them. This led to policy changes at the State level to suit this demand and the mushrooming of numerous Engineering colleges, mostly in the private sector. Private education means a high cost of education, which leads to increased desperation for getting a job right out of college. Every year a huge army of graduates was thrown into the labour market. Unfortunately, the IT industry – nor other industries in general - grow enough to absorb the supply of labour, especially in the latter part of the 2000’s. This led to a demand-supply gap.

Fraudsters saw a great opportunity here. They could lure unemployed graduates who were desperately looking for jobs by promising them a secure IT job in return for money. They roped in recruitment consultants to track unsuspecting prey. Such was the desperation of the unemployed that they were ready to offer up to Rs 1.5 lakhs for a Rs. 10,000/- per month job. These employees would then be put up in a rented office for a month or two without salary and the so called employers would vanish without a trace. And, at times these fraudsters turned even smarter. A case was reported where they used vendor ID cards of a multi billion dollar IT firm, invited aspirants to the firm’s campus and recruited candidates in return for money.

Many are shocked at this trend.IT/ITeS Employee Centre (ITEC), a welfare and support forum for IT/ITeS employees, has raised these concerns. Apart from providing legal support to the employees who have got cheated, they are also running a campaign to build awareness and call for stricter action from the authorities which includes a bike rally that was conducted in Bangalore in October and aconventionthat is being organized on November 26that the Govt. Secretariat Club, Cubbon Park in Bangalore.

This could be an indication of a larger economic malaise – that of jobless growth. Recently, NC Saxena, a NAC member, quoting figures from NSSO 66th round, remarked that the government could create only 1 million jobs against a target of 50 million jobs during the 11th Plan period (2007-08 to 2011-12). In contrast, the number of people in the age group 15-59 years increased by about 50 million during the period.

The situation can deteriorate if the Government does not ensure generation of jobs. It must not take for granted the silence of the students or the unemployed. We must remember that they are the ones who are at the forefront of the Occupy Wall Street protests from the very same USA on whom the Indian IT sector depends so much for its revenues.

The author works in a multi-national IT company


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