Digital Scams | Are we squandering our demographic dividend on digital criminality?

Are India’s youngsters, overexposed to social media glitz and struggling with unemployment, turning to organised digital scams for quick money?

The phone rings, a number flashes — sometimes local, sometimes international. The voice on the other end sounds authoritative, urgent. It could be someone posing as a customs officer demanding payment for an undelivered parcel, or a digital cop threatening arrest for fabricated crimes. Sometimes it’s an investment pitch, too good to be true. Often, it’s just a robocall selling everything from insurance to dubious loans. This is the soundtrack of everyday life in India. Welcome to the age of worrisome nuisance calls.

 From the scam call centres of Rajasthan's Bharatpur, Uttar Pradesh's Mathura, Jharkhand's Jamtara, and Haryana's Nuh to sophisticated WhatsApp frauds spreading across India, digital deception has reached new heights. What’s surprising isn’t the scams themselves — fraud has always adapted to technology — but the sheer scale, organisation, and frequency. It’s no longer a game of hit-or-miss for scammers; preying on vulnerabilities in the system, the economy, and human nature.

India’s relationship with increasing digital fraud is tied to a correlation: an oversupply of educated, jobless youth. According to the International Labour Organization’s 2024 report, nearly 29% of young Indian graduates are unemployed. The figure rises to a worrying 34% for women. For these individuals, careers that once promised stability, respectability, economic means, and social identity remain out of reach.

Does education necessarily offer better economic results? Even the salaries of entry level IT/ITES jobs or banking sector has not changed over past so many years. With automation and artificial intelligence increasingly taking over traditional jobs, the outlook appears bleak. Desperation, however, is fertile ground for opportunism.

For many, the lifestyle of the rich and influential — plastered across Instagram and TV screens — feels tantalisingly close yet impossibly distant. The desperation to bridge that gap, combined with the anonymity and reach of digital tools, is creating a perfect storm for organised scams.

 According to the International Labour Organization, the working-age population comprises individuals aged 15 to 64. In India, this age group accounts for approximately 67.8% of the total population, translating to around 984 million people. Furthermore, more than 65% of India’s population is under the age of 35, equating to over 942 million individuals. This demographic dividend would face challenges of digital crimes as a new skill set for easy money, if they are not provided with quality livelihood means.

 In small towns like Jamtara, scams started unorganised but quickly became refined. Fraud call centres now operate with military-like precision, targeting victims across the country — and even abroad. These scams play on fear and greed, scaring victims into parting with their money or luring them with promises of extravagant returns. Across India, fraudulent schemes have sprung up, boosted by digital tools and the anonymity they provide.

 Technology, which could be a solution, is often part of the problem. Indians now spend an average of four hours daily on their mobile devices, with significant time devoted to short-form video (SFV) platforms like Instagram Reels. These social media platforms, over 63% of its SFV engagement coming from tier-two and smaller towns, while offering entertainment, also create fertile ground for scams. Fraudsters have become adept at using social media to build trust — or spread fear — leveraging the very tools designed to connect people.

 Then there is the regulatory failure. Take the ‘Do Not Disturb’ (DND) registry, once meant to block unwanted calls. It has become irrelevant, a toothless relic in an age of relentless robocalls and fraud rings. This is despite claims of technological upgrades to the regulatory strength. Consumers, bombarded with cold calls from banks, NBFCs, and insurers, often find it hard to distinguish between legitimate offers and scams. The sheer volume of unsolicited communication has turned India’s financial sector into a public nuisance.

Even legitimate financial institutions are not blameless. Cold calls and spam messages from well-known banks and NBFCs erode consumer trust and create noise in an already chaotic system. Regulators, meanwhile, remain largely indifferent. The ongoing joke that the valuation of a highly regarded NBFC correlates with the number of nuisance calls it generates speaks volumes about the lack of accountability in the system.

Consumer privacy, already a low priority in India, is routinely trampled upon. Personal data is sold, shared, and stolen with astonishing ease, giving fraudsters an almost unfair advantage. Regulatory hashtags and public campaigns fail to mask the larger truth: India’s system for protecting its citizens from digital fraud is still evolving. Nearly 20% of all reported crimes in metropolitan cities are now cybercrimes.

 Cybercrime in India is exacting a heavy toll, with the nation likely to lose an estimated ₹1.2 lakh crore annually, according to a projection made by the Indian Cyber Crime Coordination Centre (I4C). This economic drain, is equivalent to the country’s annual education budget, not only hampers financial stability but also diverts resources that could otherwise drive innovation, entrepreneurship, and social progress. Despite this, regulatory efforts remain fragmented, with weak data privacy laws, poor enforcement, and limited accountability allowing fraudsters to thrive.

 For a nation that prides itself on its demographic dividend and its aspirations to be a global creator economy, this trend should be a wakeup alarm. It is easy to blame scammers for their actions, but the larger system enabling them deserves scrutiny. Why hasn’t there been a crackdown on data breaches? Why is consumer privacy treated as an afterthought? Why do regulators shy away from holding institutions accountable for their role in creating this mess?

 When a nation’s youth is driven more by the pursuit of shortcuts than the dignity of hard work, it’s not just their future that is at risk — it is the very soul of the society they will one day inherit. If the country doesn’t address the root causes — unemployment, lack of regulatory co-ordination, and rampant digital privacy violations — it risks squandering its potential. For now, though, the blocked numbers on our phones will likely keep growing.

(Srinath Sridharan is a corporate advisor and independent director on corporate boards. X: @ssmumbai.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.