Raghuram Rajan, the incoming governor of the Reserve Bank of India, once called modernising the country’s inefficient and under-developed financial sector a “moral and economic imperative”, the Financial Times reported. Proposing detailed reforms of the sector in a 2008 report, Mr Rajan bemoaned that the primary source of loans for most Indian households was still usurious informal moneylenders, while the financial system was “not able to meet the scale or the sophistication” of India’s large companies, smaller businesses or public infrastructure projects.

India's Lanco Infratech Ltd has started a process to restructure debts totaling 75 billion rupees ($1.3 billion) after economic weakness impacted the performance of some of its businesses such as power and engineering and construction, Reuters reported. If the process is approved by its lenders, Lanco would be the second debt-laden company to go for a major loan restructuring within nine months, after lenders to wind turbine maker Suzlon Energy in November agreed to restructure about 110 billion rupees of its debt.

India’s Tata Steel has announced a $1.6bn writedown on its struggling European division, underlining the chronic difficulties facing steelmakers across the continent, the Financial Times reported. In a notice to the Bombay Stock Exchange, the steel division of the broader Tata conglomerate blamed weak European macroeconomic conditions for the decision, the largest writedown by an Indian company.

India has accused Cadbury PLC of dodging about $46 million in taxes by pretending to produce candy at a factory that didn't exist. A 103-page report by the country's tax authorities, which was reviewed by The Wall Street Journal, accuses Cadbury's Indian unit of manipulating invoices and other documents to get a tax exemption available to companies that began production in new plants in the northern Indian state of Himachal Pradesh by March 31, 2010.

Faced with slowing growth, persistent inflation and sagging investor confidence, India’s government is pinned between conflicting pressures: economists warn that tough steps are needed to avoid long-term fiscal problems, even as political leaders are leery of introducing unpopular measures before important elections this year, the International Herald Tribune reported.

In a growing sign of companies facing difficulties in meeting their financial obligations, banks were approached for debt restructuring in a record 126 cases during 2012 for a collective amount of Rs 84,000 crore (over USD 15 billion), The Indian Express reported. During the last quarter ended December 31, 2012 itself, a total number of 25 cases were referred for Corporate Debt Restructuring (CDR) for an aggregate amount of over Rs 20,000 crore, shows the data available with the CDR cell of bankers.

One of the world's largest leasing firms has warned India the failure of troubled carriers like Kingfisher Airlines to return airplanes when they cannot pay their bills could put the country's aviation growth at risk by scaring away new funding. ILFC, which owns over 900 aircraft and rents them out to airlines for several years at a time, is the latest industry player to clash with the Indian carrier, whose financial difficulties have left its aircraft grounded since October.

Widespread speculation about the possible reintroduction of estate duty is proving lucrative for many chartered accountants. Clients, mostly high net-worth ones, are seeking advice on how to restructure ownership of assets to avoid the possibility of huge tax payments by their heirs when the grim reaper comes calling, the Economic Times reported. Estate duty, a tax on inheritance of wealth, is known in many countries as the 'death tax'. In the US, estate tax is imposed on the transfer of the 'taxable estate' of a deceased person.

India’s record current-account deficit threatens to weigh on the rupee and curb the magnitude of interest-rate cuts forecast to begin this month in support of government policies seeking faster growth, Bloomberg News reported today. The shortfall swelled to $22.31 billion in the quarter ended Sept. 30, the widest in Reserve Bank of India data beginning 1949. The rupee is down 6.1 percent against the dollar in the past three months, fanning price gains that will limit Governor Duvvuri Subbarao to a 25 basis-point rate cut on Jan.

The lower house of India's Parliament approved a government proposal to strengthen the central bank's regulatory powers, paving the way for overhauls of the banking sector that could draw investments from more foreign banks as well as local industrial companies, The Wall Street Journal reported. The bill proposes to give the Reserve Bank of India the power to take temporary control of private banks in the event of operational irregularities. It would also increase the limit on the voting rights of any one shareholder in a private bank to 26% from 10%.