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That may not be appealing to the Kashmiris.i think making kashmir a joint territory with pakistan is a good option. make kashmiris roam around in kashmir( both J&K and POK) with local govt dealing with every issue related to environment and municipality.
foreign policy of both India and pakistan should be changed to accommodate such jointly held territory. J&K will be shown in Indian map and PoK in pakistani map but this will be final thing. both currency can be used in the regions or currency exchanger should be there at every highway and rail stations for facilitating easy transaction. resources of this region as a whole will be 50% devoted to kashmiris and rest for the respective nations.
also the thought of gaining some sort of independence from any of the nation or going solo with any one nation should be constitutionally banned.
What then?