KARACHI: Private sector borrowing declined in Punjab during a year despite both economic and political support by the government, while Sindh showed an improvement.

According to a statistical bulletin issued by the State Bank, private sector borrowing in Punjab declined to Rs1,295 billion till December 2013 against Rs1,324bn in December 2012. Overall borrowing in Punjab showed disappointing trend as stock of borrowing fell to Rs1.701 trillion against Rs1.736tr a year ago.

This would be surprising for experts who believe that Punjab is the focal point of economic activities since the same political party rules the centre as well as the province.

Know Private sector borrowed Rs286bn in seven months

Overall borrowing of Sindh rose to Rs1.917tr till December 2013 compared to Rs1.612tr. The province seems to be more active despite the fact that Karachi, the provincial capital, witnessed severe law and order situation during the last six years.

Private sector in Sindh borrowed Rs1,200bn till December 2013 compared to Rs986bn in December 2012.

However, both the provinces showed that economic activities remained heavily concentrated in urban areas. In Punjab, out of Rs1,295bn borrowing by the private sector, only Rs95bn were borrowed in rural areas.

Sindh showed the same pattern since out of total Rs1,200bn borrowing by the privates sector, only Rs33bn was borrowed in rural areas.

Khyber Pakhtunkhwa (KP) and Balochistan had no match as private remained far away while comparing the volume of borrowing in Punjab and Sindh.

Private sector of KP borrowed Rs29bn till Dec 2013 showing a decline from Rs30bn in December 2012.

Balochistan’s borrowing was negligible as economic activities remained almost static. Private sector borrowing in the province actually fell to Rs6.3bn from Rs6.7bn a year ago.

The borrowing in these two provinces clearly shows that the private sector was not taking risk of doing business.

Both the provinces have been a victim of terrorism in the past and the situation is still not viable for the private sector.

Islamabad was a much better position compared to the two provinces, but private sector activities showed a significant decline during a year.

Private sector borrowing in Islamabad fell to Rs144bn in December 2013 compared to Rs185 billion in December 2012.

The situation in Islamabad is better, but the private sector could not show its potential despite an aggressive campaign by the government for economic growth.

Published in Dawn, August 8th , 2014