One of the solutions for the Kashmir problem is to grant more autonomy for the state. But Arvind Lavakare in this article writes that the state has all the freedom it wants by staying with the Indian Union.

J&K is the only state in India where a distinction has been permitted to be made between state citizens (designated as ‘permanent residents’) and other Indian citizens (who are not ‘permanent residents’) and where — contrary to the principles of equality before the law (Article 14), prohibition of discrimination on the ground of place of birth (Article 15) and equality of opportunity in public employment (Article 16), — laws are permissible to confer special rights and privileges on ‘permanent residents’ with respect to employment under the state government, acquisition of immovable property in the state, settlement in the state and right to scholarships as well as other state government aid

As though all of the above and more besides was not enough to honour the ‘special status’ of J&K, the nugget that insults the dignity of India is Section 64 of the J&K constitution. This section stipulates that the oath of affirmation to be made by i. a candidate for election to the state legislature ii. a member of the state legislature iii. a deputy minister and a minister (including the chief minister) of the state government and iv. a judge of the state high court should ‘bear true faith and allegiance to the constitution of the State as by law established.’ Note that the allegiance here is exclusively to the constitution of J&K state and not to the Constitution of India in addition.[Rediff]

So here you have a pampered state which does not owe allegience to the Indian Union and still get subsidised by the country and no political party in India has the guts to abrogate this.

Magnum Software Services, located on the outskirts of Srinagar, Kashmir’s main city and the nerve center of a 15-year revolt against Indian rule, has become the first company in the region to bag an international back-office services contract. The firm has recruited 315 young Kashmiri men and women in recent weeks to format medical files and research data for a Singapore client. Soon it also plans to provide accounting and legal transcription services.[NY Times]

Besides this foreign investment, there are Indian companies investing in Jammu and Kashmir as well. Other than tourism and export of Kashmiri shawls, now new industries are popping up creating more employment, which alone can lead to a decrease in terrorism.

Q: So what happens if you go to one of the schools where you are involved and a young Muslim kid comes up and says

The Macroeconomics team of PricewaterhouseCoopers is predicting that India will win 10 medals in the Athens Olympics.

The Indians managed only one bronze medal in the previous edition at Sydney, but the analysis, which takes into account factors like population, average income levels, whether the country is the host nation and whether it was previously a part of the Soviet Bloc, predicts an unprecedented haul for the country.[Rediff]

Note that the study does not take into account the number of medals India has won in the previous Olympics. Also it does not take into account of the fact that India did not send troops to Iraq.

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]

During the partition of the subcontinent on religious lines, it would have been natural for Kashmir, a muslim majority province to go with Pakistan. The blame for that not happening should go to Pakistan according Owen Bennet Jones in his book Pakistan, which I am reading now.
According to Jones, the state of Jammu and Kashmir was established in the first half of the 19th century by a Jammu chieftain called Ghulab Singh. Starting from Jammu he added Ladakh, Baltistan, Kashmir Valley and Gilgit. The muslims lived in poverty and the later Maharajah Hari Singh never cared much about that.
When the subcontinent was to be partitioned, the princely states were faced with the option of joining India, Pakistan or staying Independent. While most states chose to join India or Pakistan, the Maharajah of Kashmir decided to remain Independent. In August, 1947 Jinnah had mentioned that “Kashmir would fall into our lap like a write fruit”.
But Jinnah never did anything to win Hari Singh’s support or as Jones puts it, “Throughout 1947 Jinnah’s approach to Kashmir was inept and at every stage his Indian counterparts outmanoeuvred him”. From 1934, Nehru had established a relation with Sheikh Abdullah and had addressed National Conference rallies in 1945. Once when Sheikh Abdullah was arrested, Nehru came to Kashmir, got himself arrested and met the Sheikh in prison. The Muslim League was totally inept at that time and remained totally passive with respect to Kashmir.
Once the British left, a revolt started in Poonch and spread in the state, which was backed by tribesmen from NWFP who came to support their Muslim brothers. The Poonchi and Pakhtoon tribesmen reached near Srinagar and cut of Srinagar’s power supply. The tribesmen forgetting that they were freedom fighters started plundering and the local population turned against them.
Faced with this threat, the Maharajah had no other go other than to request help from India. But the India would not intervene unless the Maharajah joined the Indian union. So he signed the Instrument of Accession and the airlift of Indian troops began on 27th October. So instead of seeing the fruit falling into his lap, Jinnah saw it fall into India’s lap.

One of the pre-requisites for bringing in peace in Jammu and Kashmir would be to talk. One of the pre-requisites for talking is to have peace. This is a chicken and egg problem. So the terrorists found an easy way to break the deadlock.

Muslim militants killed nine Indian troopers in an attack on a paramilitary camp in divided Kashmir, just hours before India and Pakistan, which both claim the region, began a round of peace talks. Wednesday night’s attack on the heavily guarded camp in an upscale residential district of Srinagar, the capital of Indian Kashmir, came just as the soldiers were sitting down to dinner, police said. One militant was killed inside the compound after exchanging sporadic fire with soldiers through the night. The whereabouts of the other rebels was not known. [Reuters]

Also Pakistani Superman Gen. Musharraf came up with an announcement that more Indian soldiers had died in Kagil than Pakistanis.

In a rare reference to Kargil, Pakistan President Pervez Musharraf has disputed deposed Prime Minister Nawaz Sharif’s account that more Pakistani soldiers were killed during the conflict than the previous two wars against India, claiming New Delhi suffered more casualties than Islamabad.[Indian Express]

If these steps do not build confidence in the peace talks, then I don’t know what will.