updated 8/25/2005 8:50:35 PM ET 2005-08-26T00:50:35

The Indian outsourcing industry is trying to combat data fraud by starting a project to compile the work histories of all its employees, the country's main software trade body said Thursday.

The records will be controlled by a government-mandated electronic depository and used by companies to screen prospective employees, said Kiran Karnik, president of National Association of Software and Service Companies.

A pilot project to cover workers at a handful of call center workers was launched this week, Karnik said. The project will eventually expand to cover other back-office workers and software programmers, he said.

Scores of firms in the United States and elsewhere farm out office functions such as telemarketing, handling customer calls, payroll accounting and credit card processing to countries such as India, where wages are low and skilled professionals are abundant.

India accounts for 44 percent of the revenues generated from businesses outsourced by such companies, but stray instances of data theft and fraud by call center employees have been worrying.

In one case, authorities accused three workers of a firm hired by Citigroup Inc.'s Citibank of helping to cheat four Citibank customers out of nearly $350,000.

Participation in the database by workers will be voluntary, although companies may eventually require it as a prerequisite for employment, he said.

The work histories will be kept by National Securities Depository Ltd., which was set up under government regulations and currently keeps securities worth $380 billion for 6.6 million investors in electronic form.

In a separate effort to prevent data fraud, Karnik said an expert group set up by the Indian government to tighten India's data protection laws has finalized its recommendations.

One proposed change makes it easier to prosecute anyone who sells or buys outsourced data illegally, he said. He refused to discuss other amendments. He hopes they will become law within six or eight months.

India earned $17.2 billion from outsourcing in the fiscal year that ended in March and expects that amount to grow by at least 30 percent this year.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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