The Week in Review for 19 August 2011

The Week in Review for 19 August 2011

Real estate giant DLF may have to cough up a huge sum of money for alleged misuse of its position. The Competition Commission of India has imposed a penalty on the company for charging customers on any resale. It has demanded a payment that’s the equal of 7% of average turnover from the last three years. That amounts to a total of about Rs630 crore. CCI started investigating the case back in 2008 after an owners’ association at DLF Belaire filed a complaint. DLF says it’s consulting experts and that it has a strong case. The firm has about two months to appeal against the penalty with the Competition Appellate Tribunal.

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India’s biggest airline is charting a course towards a new business model. Chairman Naresh Goyal said the company’s board and management are reviewing current operations including the multiple brands on offer. Jet Airways has started implementing some changes. Key among them is a plan to introduce more low cost flights. Jet already gets three out of every four of its tickets from its no-frills services. And it currently has three brands-- the full service Jet Airways and two low-cost ones, Jet Lite And Jet Konnect.

On the economy, inflation in India remains stubbornly high despite a slight easing last month. The high figures make it more likely the Reserve Bank will continue its policy of monetary tightening. The wholesale price index reached 9.22% in July. Back in June it was at 9.44%. The numbers are subject to revisions. The government has already revised inflation for May upwards by half a percentage point. But the figures do confirm the consistent of rising core inflation. Manufacturing inflation for July was 7.49% compared to 5.78% in the same period last year. Food inflation on the other hand, was at 8.19% in July from 18.48%.

And the easing in food inflation continued into August. The food price index for the week to 6 August stood at 9.03%. The previous week it was at 9.9%. But the easing in food inflation was largely because of a fall in the prices of pulses, while most other food items remain just as expensive.