For me one thing is clear. As long as the Pakistani Military (includes ISI etc), is allowed to remain a potent force inside Pakistan, the hostility towards India will remain.
Sooner or later India will have to draw concrete plans to neutralize the pakistani military.
For starters, I would suggest we embark on the following path.
We should use the area of our maximum relative strength vis-a-vis pakistan to strike. Our economy and the siz eof our market are the biggest relative advantages that we have as compared to Pakistan. I suggest a plan to be carried out over the next 5-6 years to completely ruin pakistan's economy.
1). In the wake of current terror attacks, India should pass a new Anti-Terror Funding Law.
India should first officially declare Pakistan as a state sponsoring terror. Under the new law, all companies and individuals would be required to certify that they are not involves in funding terror, directly or indirectly, if they have any kind of operations in terror originating countries (read Pakistan).
What this would mean is that all MNC's, if they have operations in Pakistan, would have to certify that neither the company directly nor any of its employees or vendors are involved in funding terror. Any contributions to JuD type of "charity" organisations would be construed as terror funding.
Apart from this, all companies sourcing goods from Pakistan and also having operations in India, would also have to certify that none of the companies, including all employees, from whom they are sourcing goods, are not funding terror in any way.
The above provisions would be impossible to meet for almost all companies. What the above would basically mean is that If a company wants to have operations in India, it should cease all operations in Pakistan. If not, then till the time that the company can furnish the required documentation, its future expansion plans in India would be put on hold. The existing operations would go on, but any kind of changes to existing operations and all future operations would be put on hold.
The size and potential of the Indian market is an order of magnitude bigger then pakistan's.
The above law if executed, would mean almost all MNCs, like Pepsi, Coke, Adidas, Nike etc. would have to shut their operations in Pakistan and repatriate the proceeds from sale of their business. The companies would suffer some loss, but perhaps the Indian govt. can provide certain short term tax breaks for companies complying with the above law.
This would mean a huge loss for pakistan in terms of jobs and foreign currency. The job loss would be mainly be amongst the RAPE class and the educated elite.
Moreover, exports from Pakistan of things like textile, clothing, sporting goods etc. would take a big hit. We can offer to open multi-brand retail for the likes of walmart etc., provided they shut down all sourcing from Pakistan for their worldwide operations. Not just multi-brand, single brand companies like Gap, Levis etc. also source from Pakistan.
This would hit paki exports really hard, and also job losses and loss of business for exporting companies.
Even other essential imports would take a hit. Cellphone companies like samsung etc. can cease operations, thereby reducing the pakis to buying imported gray market stuff only, with no official after sales service.
Boeing and Airbus can be forced to stop their service and after sales operations in Pakistan, after reviewing the fine print in their existing contracts, forcing all civilian aircrafts to be flown to the gulf or elsewhere for maintenance and repairs. If the contracts don't allow closing down of the service operations, maybe with the right kind of carrot and stick approach the Indian govt. can make these companies downsize these operations. This would hinder the smooth operations of the civil air traffic in pakistan.
All of the above, would put a huge burden on the paki economy and would lead to flight of foreign exchange from pakistan.
Apart from this, we also have good expertise in Financial scams in India. Not just the good old fashioned 10% commission like Zardari, but more sophisticated stock market and bank related scams.
I would propose to start with a Ketan Parekh style stock market scam, in pakistan. Start pumping up a few chosen stock of actual companies, as well as shell companies in the karachi stock market. The operation would go on for a good two years. With high global liquidity and soaring Indian stock market, the media in pak should be manipulated to highlight this rise as a very good thing for pak and encourage maximum no. of pakis to invest.
The markets should be driven up by about 150% minimum over two years. A lot of the funding should be obtained from paki banks, the same way fraudsters in India are able to get dubious loans sanctioned.
After this, like Ketan Parekh, the inflated stocks should be hypothecated to the banks to get loans against shares.
The money thus obtained should be used to buy gold etc and send that to India.
Once a we reach a substantial amount, the stories should get planted in the paki media, exposing the shell companies and a lot of the other financial irregularities. The stocks still being held, by our agents should then be dumped enmass to crash the market.
We would also need to have a few of the mutual fund managers etc. on our payroll to do the dirty work and assist in the pumping and then the dumping operation of shares.
The markets should be crashed and with no real support from the actual economy the crash should be to the tune of 80% atleast.
Once the crash is well on the way, the stories about banks holding substantial amount of stocks as collateral should appear in the media. Every new report would add to the notional loss that the banks would be looking at. The nos. should get exaggerated with every passing report.
A few of the bank branch managers that have assisted in the passing of dubious loans, would then be used to create a temporary liquidity shortage in the banks. The reports about losses to the banks and short liquidity position, would lead to general panic and a classic run on the banks. The stock scam would have targeted only 2-3 amongst the top 5-7 banks in Pakistan, but the resulting panic and run on the banks would mostly affect the entire banking sector.
The stock market scam, resulting in big losses to a lot of people and bank problems should be used to motivate the TTP type jihadis in pakistan to declare a ban on the stock market and a ban on western style modern banking. For good measure a dozen or more grenade attacks should be encouraged on bank branches. These would be soft targets and such attacks would be easy to carry out. The attacks would be carried out by TTP like jihadis only and not by us.
If possible, a large truck bomb attack to be carried out on the karachi stock market, being labeled as a gambling den by the Jihadis and hence un-islamic..
All of the above, would bring the entire formal financial sector in pakistan to its knees.
Through lifafa media, the govt would be pressurized to not only re-capitalize the banks, but also make good all losses incurred by the public, due to the stock market crash. Also, under pressure from Jihadis and media, govt of pak to declare conversion of the entire banking sector to strict islamic banking only.
This would mean a further flight of capital from the country. Most RAPE class would use their most preferred hawala channels to take as much money out as possible and park it in Dubai, London etc.
More importantly, the repatriation from Non-resident pakis would almost stop.
The recapitalization of banks (given the corruption in pak, most banks would exaggerate the loss a-la farm loan waivers in India and get more money from the govt) and making up for some of the losses in the stock market would force to govt. to print a lot of money. Also, the loss of foreign exchange, drop in exports, drop in Non-resident receipts, and almost zero FDI, would mean that the paki rupee would have to devalue big time. With dollar tap from US now coming to a close, the coffin would tightly shut.
From the above, I would expect the following results on paki economy.
1). Paki rupee drops to between 120 to 140 to a dollar.
2). Official Inflation would be above 20%.
3). GDP growth less then 2.5%.
4). CAD to reach 8% to 10% of GDP.
5). Trade deficit uncontrollable.
6). Over 50% of pak budget to be used for debt servicing.
7). Pak officially defaults on interest on loan payments.
. Narcotics and arms smuggling only viable options for funding paki military.This would teach pak the anjam of dushmani with India.
Would welcome all members to details other military and non-military steps that India can take to truly punish pak for its terror activities.