How the scam works:
This could really happen anywhere, but it has been reported as occurring particularly at temples, religious festivals, or other sacred spots in India.
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People offer to perform a ritual for you and then ask for a donation, which is fine. What you don’t want to do is to ask “How much?” and then feel bad when they aggressively ask for a sizeable amount. This is being pulled usually at cremation sites where the hosts strongly pressure tourists to make a donation for the poor families who need to buy wood to cremate the deceased.
How to avoid:
They are very good at bullying people. Make sure you have some change with you. However, you should be the one to choose the amount, not them.
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This is very common at the place they burn bodies by the Ganges in Varanasi. An employee asks for a donation towards firewood for the poor people, I suggest politely declining to give them any money, most commonly they keep the majority of the money for themselves. Also beware about taking photos at this place, tourists get fined by the police if they attempt to take photos there.