What do you get when you combine Indian technical wizardry with a desperate shortage of spots in higher education? Some really fancy exam cheating.

Delhi police this week arrested five men they said are part of an elaborate scam to crack the entrance exam for elite public postgraduate medical schools.

The police say two of the men – recent MBA grads – pretended to be candidates and went in to write the exam with Android cellphones strapped to their forearms, hidden beneath their shirt cuffs. They used the cameras in the phones to scan the exam questions through holes in their coats, and images of the pages were sent automatically and wirelessly to an email address.

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In a bedroom a few blocks away, a recent computer science graduate downloaded the images and printed out the exam paper. He handed it over to the scam kingpin, a second-year medical student, who sat surrounded by textbooks and some friends, and solved the problems.

He then sent the answers back to at least six candidates writing the exam; they had Bluetooth devices stitched into their shirt collars that sent the answers to microchip earplugs the men were wearing.

Police say the candidates had pledged to pay as much as $70,000 each for the service, if they passed – and the scammers were holding their original degrees (without which a graduate cannot get a job) as collateral.

Some 70,000 candidates who had completed an undergraduate medical degree wrote the exam for postgraduate specialization at 156 sites across the country last week, competing for 4,000 spots. It was the first time that there has been one-standardized test for medical school entrance.

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The cheating plot is reminiscent of a hit 2003 Bollywood comedy called Munnabhai M.B.B.S. about a young man who fakes his way into medical school to please his father, using an earpiece to get exam answers.

It appears that this plot was busted after a disgruntled fellow candidate who knew of the service but couldn't afford it tipped off police. While the exam was in process, cops arrested Mohit Chaudhry, 23, the answer man, who had sent back just two answers to 300 questions on the 23-page paper. He then told police how to find the men receiving his answers in their tiny earpieces.

The scheme took some time to implement: the two fake candidates who scanned the answers needed fake undergraduate medical degree papers, and had to pass an online exam and be issued ID numbers to be allowed to write the postgraduate entrance test.

India is short of an estimated 1,500 universities. Government has been reluctant to open the field to the private sector, but achingly slow to approve, build and staff new post-secondary institutions itself. As a consequence, competition for spots in the existing schools is fierce. Many candidates study for years; while tuition rates in the public medical schools are minuscule, many students pay tens of thousands of dollars to "coaching centres" to try to get in. Each week newspapers carry reports of suicides by failed candidates who feel they have disgraced their families and wasted their savings.

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All candidates writing the exam were meant to have been thoroughly searched. But others who wrote the test at the site said there was no physical search, perhaps because the fraudsters had bribed the security guards.