By the early 1970s, Lakshmi’s daughter Subhashini had joined the CPI(M). She brought to her mother’s attention for doctors and medical supplies for Bangladeshi refugee camps. Captain Lakshmi left for Calcutta, carrying clothes and medicines, to work for the next five weeks in the border areas. After her return she applied for membership in the CPI(M).
Captain Lakshmi was one of the founding members of All India Democratic Women's Association (AIDWA), formed in 1981. She subsequently led many of its activities and campaigns. After the Bhopal gas tragedy in December 1984, she led a medical team to the city; years later she wrote a report on the long-term effects of the gas on pregnant women. During the anti-Sikh riots that followed Prime Minister Indira Gandhi’s assassination in 1984, she was out on the streets in Kanpur, confronting anti-Sikh mobs and ensuring that no Sikh or Sikh establishment in the crowded areas, near her clinic were attacked. She was arrested for her participation in a campaign against the Miss World competition held in Bangalore in 1996.