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In my opinion, this is unethical. If I spend a few hours developing software for a client, I would earn about between $30 to $200 depending on where I am. It is unreasonable to expect me to spend that time developing a purposeless toy software without being paid and lose my roughly $100 of income.

I don't know much about Surya Software Systems but if you look at their organization page, there are exactly two repos: The Interview repo of this post link and SwiftUtils which they don't seem to have any intention of maintaining.

It is ironical that they have not contributed anything to the open source community despite owning a GitHub account but are gratuitously demanding a software project to be developed for them even before you could apply for a job there.

No, thanks! There are plenty of companies out there that are more respectful to their employees.

Is there any other profession that would do something like this? Can you imagine a lawyer or accountant spending several hours on a fake case/audit to prove themselves.

I would be willing to spend several hours on a project for them if they spend the same number of hours doing something to help me. Then see how many want to put that effort in.

Or imagine a surgeon being asked to perform a fake surgery before being offered a job.

If my degree does not mean anything at all in the software field, I wonder why we spend so much money on getting a degree!

I've been asked to do a codility test (online 3 problem coding test) before one interview and a short basic form processing code for another interview. Both took about an hour. That seemed fair to me, though if it were longer I probably wouldn't feel that way. It also was clearly not "real" work they could use for production.
A toy problem to be solved in an hour is quite reasonable. Anything more than 2 hours and I would expect to be paid by the hour!
From their interview problem page at https://github.com/surya-soft/Interview/blob/master/WS.md :

"The point of this exercise is to benchmark your writing skills. Write an approximately 500 word article about something you're passionate about that's technology related."

The holier-than-thou approach taken here is sickening. Why does this company expect a prospective employee to do all this without even a guaranteed date for an interview?

They have invented a deplorable interview screening procedure where the company has to invest zero time on the candidate but the candidate has to dedicate a few hours to prove that you can read and write before they are willing to engage in a conversation with you. This inequality is disgraceful.

Reminds me of another prior discussion at https://news.ycombinator.com/item?id=15275182

I wonder why software companies these days take it for granted that professional software developers who code for a living would spend half a day from their schedule or work overtime for free.

Now, don't give me the argument that many developers do it anyway by writing open source code. That falls in the category of "volunteering". Working overtime and spending 4 hours on solving a toy problem is not volunteering.

It doesn't seem unethical to me. It does seem unreasonable to ask someone to spend 4 hours doing a test before you talk to them about the job. I couldn't be sure when the "write some code" part comes in the interview or application process.