The Government on Tuesday said it would not accept any tied or conditional external aid.
Addressing the consultative committee meeting attached to his Ministry, Finance Minister P Chidambaram said though India is not an aid-dependent country, it has to adopt a balanced approach as there is no harm in utilising it as it provides access to improved technology and acts as a disciplining factor.
There are 434 ongoing externally assisted projects, out of which 226 are being implemented in the state sector and the balance are multi-state and central sector projects.
Last fiscal, India received Rs 18,464.51 crore as external development assistance, of which 67 per cent was from multilateral agencies.
This includes Rs 9,561.29 crore from the World Bank and Rs 2,645.35 crore from the Asian Development Bank.
However, India has not had to avail of IMF loans for more than a decade now.
Chidambaram said the Government had accepted the recommendation of the 12th Finance Commission to pass on external assistance to states on the same terms and conditions on which it was received.
Accordingly, in case of new projects signed since April 1, 2005, the external assistance will be passed on "back to back" basis.
Chidambaram asked the states to use their capacity in designing good projects and presenting them in a manner so that the donors are convinced.