Govt-Backed ₹32,000 Crore LIC Plan to Support Adani Group Raises Questions

Report reveals coordinated investment effort involving Finance Ministry and NITI Aayog amid global scrutiny of Adani companies.

New Delhi | October 25, 2025

The Revelation

Internal documents cited by The Washington Post show that the Finance Ministry and NITI Aayog helped steer LIC funds into Adani Group entities during mid-2025. The plan, described as “strategic support for critical national infrastructure,” involved major bond purchases and equity infusions in Adani’s ports and renewable-energy units.

A key example: Adani Ports and Special Economic Zone (APSEZ) issued a $585 million bond (≈₹5,000 crore) in May 2025 — fully subscribed by LIC. Additional allocations were reportedly made to Adani Green Energy Ltd., aligning with the government’s green-energy agenda.

Officials involved justified the move by calling Adani’s infrastructure “central to India’s growth mission,” even as several global banks and investors reduced exposure to the group following U.S. legal proceedings.

Financial and Public Concerns

LIC — the state-owned insurer that manages savings of nearly 250 million policyholders — now faces scrutiny for concentrating large sums in a single private conglomerate.

Market experts warn this exposes public funds to significant credit risk.

“An insurer’s core responsibility is to protect people’s money, not to serve as a corporate backstop,” said an independent analyst quoted by The National Herald.

Opposition leaders claim the plan amounts to a bailout of a politically connected empire. They allege this pattern of support blurs the line between public policy and private interest — an issue that has followed the Modi-Adani relationship for years.

Political Reactions

The Congress Party and other opposition blocs swiftly demanded a Joint Parliamentary Committee (JPC) investigation.

Rahul Gandhi revived his earlier accusation that “Modi and Adani are one,” alleging state institutions were being used to protect a single business house.

Government officials countered that LIC operates under professional investment norms and that the exposure “remains within regulatory limits.” They emphasized that Adani stocks have recovered sharply since last year’s Hindenburg-triggered crash, producing profits for the insurer.

Adani Group’s Response

The Adani Group dismissed the report as “politically motivated and misleading.”

In a statement, the company said all its funding arrangements were “market-based and fully compliant with Indian law.” It highlighted that partnerships with state-owned financial institutions, including LIC, predate the Modi administration.

“We remain committed to transparency, sustainable growth, and national development,” the group added.

Broader Implications

Economists say the episode underscores India’s growing state–corporate convergence, where government-linked entities are used to stabilize private conglomerates deemed vital to national ambitions.

Such intervention, while framed as economic strategy, can weaken investor confidence if it appears politically driven.

There are also calls for the Insurance Regulatory and Development Authority (IRDAI) to examine LIC’s exposure to highly leveraged groups and set clearer caps on sectoral concentration.

The Road Ahead

As Parliament prepares for the winter session, the opposition plans to raise the issue, seeking full disclosure of all LIC investments made under government direction. Analysts believe transparency from both LIC and the Finance Ministry will be crucial to maintaining market confidence.

The $3.9 billion plan may have stabilized Adani’s balance sheet in the short term — but it has opened a new chapter in India’s debate over corporate favoritism, public-fund accountability, and institutional independence.

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