Of all the festivals celebrated in India, Diwali is by far the most important. Diwali celebrates the return of the Lord Rama, King of Ayodhya, his wife Sita and brother Lakshmana to Ayodhya from a war in which he killed the demon king Ravana. It is believed that the people lit oil lamps along the way to light their path in the darkness.

On this day of Diwali, many wear new clothes, share sweets and light firecrackers. The North Indian business community usually starts their financial new year on Diwali and new account books are opened on this day.

References:

http://en.wikipedia.org/wiki/Diwali