The Indian outsourcing industry has started a project to compile the work histories of all its employees to help fight data fraud, 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.

India accounts for 44 per cent of the revenues generated from businesses outsourced by western 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 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 finalised 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.

Scores of Western firms 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 earned $17.2 billion from outsourcing in the fiscal year till March 2005 and expects that amount to grow by at least 30 per cent this year.