Reason is very simple. Congress wants to remain in power by getting Muslim vote. That's why they are pampering to terrorism, caring little for 400,000 Kashmiri Hindus as Hindus care little for their religion, culture or plight of their co-religionists.
However, in my opinion, soft-policy in Kashmir will be major flashpoint in India. It will unnecessarily bring Indian Muslims into picture which should be avoided at any cost.
In the long run, Cong will be looser at both sides. Like Jinnah, Indian Muslims will drift away from Congress. Neither Hindus will feel safe under Congress.