A banner outside our favorite Indian market announcing the upcoming local Diwali celebration drew my attention. Diwali, the Festival of Lights, is the most important Hindu holiday and marks the beginning of the Hindu new year. According to All Asia Food NewsBytes, the Indian population will be the largest ethnic Asian group in the US by 2010 if its growth rate continues. Perhaps this explains why even the White House started to host an annual Diwali celebration three years ago. We went to the event, which took place on the grounds of Pierce College in Canoga Park, California. Although it was not advertised in the mainstream media, hundreds of people from India showed up, and many women wore their colorful traditional garb. We were treated to terrific Indian dance performances by teenage girls and boys, who were impressive in their grace, energy and enthusiasm. As I had hoped, I found very interesting food. A long line formed for the dosas, tasty South Indian rice pancakes. To spread the batter thin on the griddle, the chef used circular motions that reminded me of the French technique for making galettes de sarasin (buckwheat crepes) at creperies. For my husband and me, the festival's culinary highlight was tasting two delicious dishes from South India. Both were made of rice and lentils and were further proof of the region's cooks' talent in using them. One, pongal, was a white rice puree dotted with yellow mung beans and enriched with ghee (clarified butter). Although it was accented with black peppercorns, cumin seeds and grated gingerroot, its flavor was fairly mild. When an Indian woman told us that some eat pongal for breakfast, we weren't surprised; its soft satisfying texture, which reminded us of mashed potatoes or polenta, made it perfect comfort food. The second dish, bisi bele bath, was orange in hue and definitely spicy. Like majadra, the Middle Eastern rice with lentils familiar to us from mizrahi restaurants, it had sauteed onions. But this Indian dish had many more spices and was studded with diced vegetables - carrots, potatoes and green beans. Both lentil-rice dishes had another feature in common - roasted cashews. In fact, I reflected, quite a few Indian specialties I've tasted were punctuated with them: yellow rice with cashews and mustard seeds, vegetable dumplings in cashew-thickened sauce, semolina halva with cashews and cardamom seeds, rice pudding with cashews and raisins and Sri Lankan lovecake, to name a few. Spiced cashews are prominent at Indian snack shops. According to an Indian sweets producer, cashew treats are important food gifts exchanged for Diwali. I wondered why cashews were so popular in India. After all, they are originally from Brazil. The link was provided by the Portuguese explorers, who noticed that the Brazilian natives liked them roasted, and introduced them to India in the 1500s. In India, people took to them in a big way. Today, India is the world's top producer and exporter of cashews. This year the Cashew Export Promotion Council of India is marking its 50th anniversary. Cashews are not really nuts, but are seeds of the cashew apple. According to The World's Healthiest Foods Web site (www.whfoods.com), cashews are heart-healthy because much of their fat is the same monounsaturated fat found in olive oil. Cashews are sold shelled because their shells contain a resin which must be removed in order for the nuts to be edible. When choosing cashews, be sure they are not blemished or shriveled. For longer storage, keep them in the freezer. LENTILS AND RICE WITH CASHEWS AND VEGETABLES Some call this whole-meal entree "rice in lentil sauce," as the lentils disintegrate as they cook. Indians use a lentil called toor dal, but our common orange lentils make a good substitute. The proportion of lentils to rice varies from one-third lentils to equal amounts of both. Cooks use whatever vegetables they have - cauliflower, sweet peppers, carrots, tomatoes, potatoes, peas, squash or eggplant. Preparing the stew the authentic, South Indian way calls for some unusual seasonings and involves several steps, including toasting and grinding your spices. Here is a simplified version made with easily available ingredients. Use enough salt so the dish will not be bland. It should be spicy but add the number of hot peppers you like. Indian cooks generally leave whole spices in the dish; remove them or remind diners not to eat them. 3 Tbsp. vegetable oil or butter 1 large onion, chopped 1 red or green sweet pepper, diced 2 to 4 fresh hot peppers, seeds removed, chopped, or whole dried hot peppers 1 tsp. ground coriander 1 tsp. ground cumin 5 cups water 1 cup orange lentils, picked over and rinsed 1 cup white rice 1 large carrot, diced 2 pale-green squash (kishu), diced 3â„4 cup fresh green beans, cut in 2.5-cm pieces, or frozen green beans or peas (optional) salt and freshly ground black pepper to taste 1 bay leaf 1 cinnamon stick or pinch of cinnamon pinch of ground cloves 1â„4 teaspoon ground turmeric 1â„4 to 1â„3 cup cashews cayenne pepper to taste 2 Tbsp. grated coconut, lightly toasted (optional) 2 Tbsp. chopped fresh coriander (optional) Heat oil in a large saucepan. Add onion and saute over medium heat, stirring occasionally, for 7 minutes or until softened. Add sweet pepper, fresh or dried hot peppers, ground coriander and cumin and saute for 30 seconds, stirring. Add water and bring to a boil. Add lentils, rice, carrot, squash, green beans, salt, pepper, bay leaf, cinnamon stick, cloves and turmeric and return to a boil. Cover and cook over low heat for 20 to 30 minutes or until rice and lentils are very soft. Mixture should be soft and thick but not dry. Add hot water if dish needs to be more moist; if it is too soupy, cook uncovered over medium-low heat, stirring often, until thickened. Add half the cashews. Taste for seasoning, adding cayenne if needed. Serve very hot, sprinkled with coconut, coriander and remaining cashews. Makes 4 to 6 servings. Faye Levy is the author of Feast from the Mideast (HarperCollins).