ABSTRACT
The familiar academic debates on the role of private foreign investment (pfi) and technology in the development process have often been rehearsed in the Indian context. Most developing countries in the shadow of yesteryear's colonialism and jealous of their political independence are wary of foreign economic domination. Exposes of attempts by some multinational companies to destabilize foreign régimes, and of the bribing of foreign officials, have heightened the innate hostility of developing countries towards pfi. One of the principal criticisms of pfi in India is that it has had an adverse effect on the balance of payments. The balance-of-payments effects of a project are, by definition, the net savings in terms of foreign exchange resulting from the project. Net savings accruing to the economy are equal to the total value of output minus all the material and non-material input costs. In other words, it is the value added of the project minus the total wages costs of the project.
