Let's put it realistically and with a neutral stance. India would not attack Pakistan because it will have much to loose in case of war.
This is accurate to the extent that India will need to be severely provoked in order to trigger a military response. The present economic conditions are the best India has experienced in the last 25 years despite security threats from Pakistani non-state/state-sponsored terrorists. The indications are for close to 9.5% QoQ growth and double-digit growth is round the corner.
Pakistan has nothing to loose and so it will continue to keep fighting, possibly asymmetrical warfare which would be very damaging for India.
'Very damaging' is an adjective. If you look at absolute indicators, 26/11 had almost a negligible short-term effect on the Mumbai economy, forget India's economic conditions. It had no perceptible effect on FII investments, domestic inflows/outflows or even on public debt instruments. So net effect was zero.
Still, this attack was sufficient to provoke international condemnation and India considered different responses.
This is similar to the N Korean attack on S Korea. While the South's conventional superiority is a given, they are still not in the disposition to strike back given the economic consequences. However, a second attack of similar or greater intensity would necessitate a stringent response. Both N Korea and Pakistan would not be unaware of the consequences of such.
Though a war would be catastrophic, Pakistan does not have the economy to sustain a long war and when things start to end, it will use the only remaining option.
It is a fervent hope that the powerful in GHQ Rawalpindi understand that the end of Pakistan is their end as well. So far they have been smart to protect their survival, and I think they only benefit from keeping the situation on simmer. They are not ready or willing for it to boil over one way or the other.
However, I think an economic meltdown of Pakistan would be a game changer in this regard. I give it 10 years at least. Hopefully India will have invested significantly in internal security to prevent a large number of 26/11 or lower pain threshold attacks till then.
