The paper sets itself the task of testing the validity of the proposition that foreign aid inhibits domestic resource mobilisation and thus perpetuates the external dependence of Bangladesh. Both long run and short run analyses of the relationship between aid and domestic resource mobilisation have been carried out for the purpose. Short run aggregate analysis, done with the help of multiple regression method, reveals that aid has an overall negative effect on internal resource mobilisation. Differentiated analysis however reveals that individual components of saving behave differently, both in magnitude and direction, in relation to aid inflow. Customs duty on aided import and private monetised saving happen to be the chief contributors to the above mentioned negative impact. Short run and long run effects of aid inflow may not have the same impact for particular elements of domestic saving. A favourable movement of some of those elements, which happen to be dependence reducing in the long run, has been identified. But no conclusive remark can be made on the basis of the finding because some vital elements could not be captured in the analysis. It has been argued in the conclusion that-achievement of self reliance is a multidimensional problem, capturing economic, social and political aspects of the country.