This paper examines the project sponsoring pattern and the outcome of extramural R&D with respect to the projects sponsored by country's eleven central agencies during the Seventh Five-Year Plan period. The outcome considered are: contribution of R&D support to development of R&D facilities at the recipient institutions, creation of employment through project posts, development of new technologies, quantum and quality of research publications and generation of doctoral thesis. The paper concludes that sponsored R&D has largely remained one-way flow of funds to a preferred set of institutions (as perceived by each sponsoring agency) and the outcome of the R&D have also remained unexamined by the respective funding agencies. The paper advocates development of a monitoring system which would help in enhancing the utilisation of sponsored R&D and its overall impact on science, society and economy.