I respect your and everyone else's opinion, but here is mine.......The way I see it is:
The gun's(or toy's) purpose is not to fire at the mob to cause casualties but to scare them away (for few seconds); there's a chance that the cop maybe overpowered by the mob and the gun/toy snatched from him - at which point it could be used to instantly kill the cop (if it were a real gun). Remember, the stone pelters don't ever carry guns.
Regarding your fear about the cop getting lynched by the mob, it's unlikely that that would happen. Because this operation (of snatching the stone pelter from behind) happens with the real cops in uniform being (literally) at a stone's throw from the mob. The cops in uniform close in quickly after the ring leader is nabbed. If it were a covert operation far away from the security force contingent then I agree that it absolutely has to be a real gun.
The job of the undercover cop here is just to 'detain' the ring leader for few seconds (& prevent his quick escape) before the cops in uniform run in to arrest him.
I am not saying that I am absolutely certain that it's a toy gun, but only that the use of toy gun would be perfectly rational, safe & effective.
No Cop in the world, will go into a hostile environment with a Toy sidearm. It's his last resort of self defence, if things go south. And Kashmir is definitely, one of the most hostile environment in the world. Especially today, when not only JK policemen , even their families are being targeted.
The stone pelting mobs can swell and get out of control pretty soon in Kashmir. A small mob of 50 can swell and become a mob of 500 soon and the cop may become isolated and away from reinforcement...The cop then has to reach his reinforcements and if required protect himself with his sidearm.....So the pistol is not to fire at the crowd, but for self defence as per me...Also, these crowds are sometimes so hostile that even Army Convoys with escorts find them difficult to handle and sometimes they have terrorists hidden/embedded...
Also i am trying to see the bigger picture....The JK DGP is removed after a recent fiasco as he is considered to be too soft ....Suddenly we start seeing these Proactive Israeli style tactics....So as per me they have trained/modelled this type of tactics on world famous Israeli Tactics...and the Israelis, definitely don't carry toy guns...