What the 'Modani Megascam' means for ordinary Indians
Reports suggest that in May 2025, officials from the Finance Ministry and other government bodies planned for the state-owned Life Insurance Corporation of India to invest around $3.9 billion into Adani companies
India's government and the Adani Group, one of the country's biggest companies, are facing allegations that public money was used to help the business at the expense of ordinary people.
What happened?
Reports suggest that in May 2025, officials from the Finance Ministry and other government bodies planned for the state-owned Life Insurance Corporation of India (LIC) to invest around $3.9 billion (₹33,000 crore) into Adani companies. LIC is India's largest insurer, holding money for 30 crore policyholders, many from low-income families.
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The alleged goal was to show confidence in Adani and encourage other investors, because international banks were hesitant to lend money after US investigations into Adani associates. Opposition parties call this plan a misuse of public money and have nicknamed it the "Modani Megascam."
Why it matters
Financial Risk: LIC reportedly lost huge amounts in a single day in September 2024 after US indictments of Adani associates. Such concentrated investments put policyholders' savings at risk.
Trust in government and institutions: People trust LIC to manage their life savings safely. Allegations that the government pressured LIC to invest in a private company raise questions about fairness and integrity.
Cronyism concerns: Critics say this shows the government helping a "friend" rather than acting in the public's best interest. Allegations also include misuse of investigative agencies and manipulation of infrastructure deals to benefit Adani.
Adani Group: Denies any wrongdoing, says growth predates Modi's government, and claims LIC has earned returns from investments.
LIC: Says investment decisions are independent and board-approved; denies being pressured.
Government: Has resisted parliamentary probes into the issue.
Potential consequences
If these allegations are true, it could damage public trust in both the government and financial institutions. Adani could face more legal and financial scrutiny, and policymakers may be forced to tighten rules on how state-owned entities invest money.
The controversy highlights a tricky balance: supporting big businesses while protecting public money. Millions of ordinary Indians could be affected if the system favors private interests over public safety.
