The token income-tax relief and regressive indirect tax proposals in the Budget 2012-13 may have left a huge hole in citizens' pockets. Living simply is going to be a costly occupation henceforth. Seasoned Pranab Mukherjee, however, has done some deft work to keep certain worries at a distance from the government. The problems engulfing the airline industry has put the government in a fix. To help or not to help — that is the dilemma facing the government. With the FDI still a hot political issue, Mr. Mukherjee has done a clever act by opening the overseas borrowing window for airlines and announced a host of import duty concessions to the MRO (maintenance, repair and overhaul) sector. It is now left to the captains of airliners to use their name, reputation and skill to find resources to fly out of the mess or keep grounded.

One also sees a desire on the part of the government to keep a distance from public sector banks with Mr. Mukherjee announcing the formation of some sort of a holding company to take care of their requirements going forward. Aligning with global banking standards requires the PSU banks to update their capital accordingly all the time. How and when this happens is a different matter. The holding company concept is indeed a novel idea for the government, borrowed, perhaps, from the corporate world. Mr. Mukherjee is not the normal politician-kind of Finance Minister. Not surprisingly, he has chosen not to play for the galleries.

Rather he has trained his budget to address the core issue stifling the real estate sector. The National Housing Bank (NHB) has been allowed to float tax-free bonds up to a limit of Rs.5,000 crore. This would increase the funding source for housing finance firms at lower interest rates. Also, he has opened the ECB (external commercial borrowing) window for low-cost housing projects. More than lowering costs, the move will facilitate the availability of funds on a long-term basis to them. Though small, these are indeed crucial initial steps towards facilitating access to longer-term debt fund for the real estate sector.

In an unobtrusive manner, Mr. Mukherjee has introduced some welcome directional course corrections. There is a message in his method, which is not pleasing though.

More In: Economy | Business