The Government of Pakistan and some institutions under its control acquire loans by issuing bonds and certificates etc. and pay a fixed period wise ‘profit’ to the holders of such securities. Does this profit fall within the definition of Ribā?
The answer to this question again lies in the question itself: ‘the Government … and some institutions .. acquire “loans” and pay a “fixed period-wise” “profit”….’
‘What’s in a name. Ribā called by any other name, even “profit”, would still smell as foul, were it not Ribā called.’
The ‘loan’ is there. And a ‘fixed period-wise’ gain is there. Therefore, the gain is obviously Ribā.
Although the government is the borrower in such cases and it pays, not receives Ribā, it should not use terms that may lead the recipient of Ribā to think that he or she is receiving profit, and it should also try to gradually come out of the situation where it has no recourse other than borrowing on Ribā to run the country. This obviously requires elimination of corruption and better financial management.