Therefore, foreign resources came primarily in the form of official transfers. The private investment came mainly through technology transfer, but played a minuscule role. During this period, the development efforts and stress on BoP from time to time led India to tap diverse aid sources for specific projects.
In the 1980s, as the traditional source of official concessional flows dried up there was a need to access private capital. But, this came in the form of debt creating flows though costly external commercial borrowings (ECBs) and NRI deposits. The limitations of financing CAD through debt creating flows were exposed in the 1991 crisis.