Effectiveness of Foreign Aid to India in Post-Liberalization Era: The Self-Reliant India Expedition

The present study attempted to configure an ARDL model depicting the short and long-run effectiveness of foreign aid from the World Bank on India's growth and development. Analyzing the annual time series data of 27 years (1991 to 2017), the study indicated the effectiveness of foreign aid for economic growth in short-run and economic development in the long-run. However, with domestic savings in the country, foreign assistance only played a supportive role. Therefore, a self-reliant country like India favoured foreign assistance. The study suggested that India's Government focuses on making out policies and providing proper implementation and assistance from foreign financial assistance. Policy guidelines must be aimed at setting up a committee to review the proper utilization of foreign aid periodically. It would embark the effectiveness of foreign in the economic growth and development of the country.