Heat sufficient quantity of ghee in a kadai and deep fry lotus seeds till crisp. Drain onto an absorbent paper. Combine yogurt and water chestnut flour. Add four cups of water and blend till smooth. Remove stems, wash and slit green chillies.
Wash curry leaves and pat them dry. Heat one tablespoon of ghee in a thick-bottomed vessel, add green chillies, curry leaves cumin seeds, cloves and cinnamon and sauté till a nice aroma is given out. Add the blended yogurt mixture and bring to a boil. Reduce heat, add sugar and salt and allow to simmer for ten to fifteen minutes till kadhi is thick.
Add the fried makhanas and continue to simmer for another two minutes. Serve hot.