South Korea's Incheon beat New Delhi in an Olympic Council of Asia (OCA) vote in Kuwait on hosting the 2014 Asiad last week.
"We thought of bidding for the 2016 Olympics because we have the 2010 Commonwealth Games and were planning to host the 2014 Asiad," IOA President Suresh Kalmadi told The Times of India newspaper.
"So by 2016 we could have an Olympics for free, since by then infrastructure would have been in place."
The IOA has blamed sports minister Mani Shankar Aiyar for the failed bid, saying his statement earlier this month that New Delhi hosting the Commonwealth Games was an attempt to improve the country's global image but of little relevance to the common man caused the damage.
"But with Aiyar around there is no question of even attempting the 2016 Olympics. Now we have to look at 2020. For now we will concentrate on staging the Commonwealth Games in a good manner," Kalmadi said.
New Delhi is to stage the 2010 Commonwealth Games at an estimated cost of 70 billion rupees.
