Fears of tougher penalties grow as India cleans up business

Mumbai

AN UNPRECEDENTED ban on India's largest property developer from tapping capital markets has fuelled expectations of tougher penalties ahead, as the country's regulators feel emboldened to take on even companies long sheltered by political connections.

The result has been a slide over the past week in shares of firms known to be under investigation - adding to what was already a year-long weakness in the stocks of companies seen as tied to the Congress party, which was ousted from power in May.

Cleaning up India's grubby business climate is top of the agenda for both regulators and Prime Minister Narendra Modi's government, which was elected in May partly on a promise to do just that. India ranks 94th among 177 nations in the global corruption index published by …