Let's assume people are getting sick in my city and we need hospital and government don't have cash to build hospital. What should we do as government should not take a loan to build hospital for us?
No Okara, you have mixed up the issues.
The thread talks about Why the Islamic Republic of Pakistan gives loans to people on Interest when it calls it Riasat-e-Madina and you have given example where you are proving the government can only build the infrastructure by collecting funds that are only available on Interest.
The issue is not paying Interest but collecting Interest.
The government of Pakistan is under obligation to pay interest when they borrow money but there is no obligation to pay out money to the needy on Interest.
You are right the government does not have many options when they borrow money.
BUT the issue here is not borrowing money but lending money.
Why the Islamic Republic of Pakistan is collecting Interest from its needy people.
What is the compulsion?
If it is not possible to give out loans without interest then don't give loans.
Even if the government is doing something which is Haram, then at least the government must not call itself a Riasat-e-Medina.
This is the whole point.
Imagine a new Islamic Bank opens tomorrow with the name "Islamic Banking " with the slogan " We only follow Prophet Muhammad Sunna and Quran " and that bank specifically tells us that we don't hide and we practice Ribah.
then how would you feel?
You would tell the bank if you want to do Banking with Ribah like National Bank, Habib Bank etc, then at least don't call yourself an Islamic bank. This is our request to the current Pakistani government, if you are practicing Ribbah where you had the power not to practice then, go ahead do it, But please don't fool us by calling it Riasat-e-Medina.
Finally, there are countries that offer Interest-free loans to their poor people.
See this link to an Australian government website. Australia gives interest-free loans to the people who need money desperately. Why can't Pakistan do that? What Australia is doing is more Islamic than what the Pakistan government is doing with Riba for their needy.
Need money quickly or have a bad credit score? No interest loans have affordable repayments, and no fees or charges.
moneysmart.gov.au
I hope now you understand the point that calling Riasat-e-Medina is a sham to fool Pakistani people.