"My guess is by not hosting the Asian Games, we probably saved ourselves something of the order of Rs 5000 crore," Aiyar said on Sunday.
South Korea's Incheon beat New Delhi in an Olympic Council of Asia (OCA) vote in Kuwait.
"If I can leverage this to provide kitty to Panchayat Yuva Khel Abhiyan (a body that promotes sport among youth in villages) by 2012, I can assure you there can be at least minimum organised sports infrastructure, sports coaching and sports management for a large population of the neglected 720 million of our fellow countrymen.
"The minute we do that we can expect to return a respectable medals tally," he told Times of India newspaper.
The Indian Olympic Association has blamed the sports minister for the failed bid, saying his statement earlier this month that New Delhi hosting the Commonwealth Games in 2010
The capital is to stage the 2010 Commonwealth Games at an estimated cost of 70 billion rupees.
"We have plunged from the height to the depth in cricket and hockey. We stand in the lowest segment in football-playing countries. We are virtually nowhere in athletics and other Olympic sports.
"The honour is being saved by just a handful of shooters, kabaddi players and the women's hockey team. You contrast this performance with that of China who got eight times more medals than India in the Doha Asian Games."