While a diplomatic or political solution to Kashmir seems far away, an economic solution would be a good start from the Indian point of view. Already the state of Jammu and Kashmir has been getting massive funds from the Indian Union.
The Union government’s aid to J&K has therefore far outstripped the growth in the GDP, which has averaged roughly 5% in this time frame. What does this mean? J&K gets a larger and larger share of central expenditure on states. In fact, it gets 10 percent of all central assistance and J&K has received more than any other state since 1995! Far out of proportion to its fair share, which by population should be about 1 percent: that is, J&K gets roughly ten times what it deserves.[Rajeev Srinivasan on Rediff]
But what is needed is more and more Indian companies setting up shop in the state so that there is economic development as well as assimilation. And the Govt. of Jammu and Kashmir is going in that direction.
FOUR leading leather companies from Chennai, including one that makes shoes for Florsheim brand, have committed to set up facilities in Jammu & Kashmir (J&K) either on their own or through collaborations with local partners. Apart from the leather sector, Mr Sayeed and Mr Sahasranamam said, the K.K. Birla group has committed to set up another textile unit at a cost of Rs 560 crore, while others like the Oswal and Dhainik Bhaskar groups are also keen on setting up textile units. [Businessline]