India is a jerk when it comes to Kashmir. They could have resolved years ago by abolishing article 76 or 56, I am not sure which one(It basically does not allow non-kashmiris to settle there).
The only possible solution I see now is: 1. banish all convicts in Indian jail to Kashmir, with one condition: they can't come back. They have to stay there and survive or perish.
or
2. Settle LTTE in Kashmir, and make the official language of Kashmir 'Tamil'.