Pakistan has already started standing down.
Can you please give me a few examples Good Sir. Name me a couple of instances where in the face of Indian demands, Pakistan backed off and accepted Indian's demands.
There is not just a single way to achieve objectives. Over the last decade, Pakistan has continuously reduced its demand/rhetoric against India.
That more has to do with Pakistan's priorities shifting to her Western borders, and also some of our misguided leaders whom are under the spell that Indian leaders want peace.
Regardless of whether you believe it was done as a goodwill gesture, policy makers know that Pakistan has been forced to do this.
Thats just good speculation Sir served for empty chest thumping for the domestic audience. Your policy makers and public likes to believe that, but unfortunately that is not backed by any evidence or logic.
Economic disparity has led Pakistan to be left far behind when it comes to getting things done in the global order. An example can be Musharraf publicly asking to be treated on the same level as India in the global fora!
India is 7 times bigger than Pakistan, thus it is obvious that her economy and military budget would be 7 times bigger than Pakistan's. The reason why India is slowly becoming the darling of west is because of the Indian market which consists of 1.2 billion consumers and in hopes of using India as a counterweight against China.
This coupled with economic disparity also makes for military budgets against which even minimum deterrence will be hard to achieve.
The strategy of minimum credible deterrence has worked quite well for Pakistan
The results are there to see. Pakistan has been backing down. Unable to conjure up the resources needed to keep matching India in the level of minimum deterrence which initself has been constantly reducing for Pakistan! What PA deemed minimum deterrence 2 decades back was much more than what it considers minimum deterrence today!
Pray tell me, when was the last time Pakistan backed off either diplomatically or militarily against India? The minimum deterrence has worked quite well for Pakistan, that is why there has not been any war. An Indian airstrike carried without any impunity or IA/BSF firing mortars and artillery shells inside Pakistan without impunity would equate to Pakistan backing down. But that has not happened, every time Indian Forces have acted belligerent Pakistani Forces have replied in kind. You would have a better argument that India has successfully managed to make Bangladesh, Nepal or Bhutan back down. You can mock the minimum credible deterrence all you want, but on ground it has worked wonders for Pakistan and i am a man who believes that 'Actions speak louder than words'.
It is not an unreasonable expectation that PA will stand down with increasing gap! To the point that the Pakistani public will question whether in the face of insurmountable odds in military capability and diplomatic heft, is Pakistan's continued enemity with India justified? Or are we wasting money with the military buying these tanks!
Good statement for domestic consumption, but holds no weight behind it.
The question the Indian public should be asking is why with all these billions spent, the balance of power is still the same in the Indo-Pak scenario. India still cannot punish Pakistan for actions she considers unacceptable and naughty. The sheer frustration is quite visible on the IA as it is trying to implement new doctrines in hopes that it might work against Pakistan, and deliver the quick victory the masses and the political masters want. If India could punish Pakistan as you state India can, believe me her reaction would have been very different after the Mumbai attacks. Lots of noise was made from the Indian side, but nothing tangible came off it.
Now how to ensure that this economic disparity keeps increasing at an increasing rate - that is the key question!
That is something your war planners have already executed. Support Pakistan specific terrorist groups with weapons and money to keep the instability going, but not to the extent where it risks the collapse of the State, which indirectly ensures that the economy stays in the dump. Thus IMO, India has delivered a master stroke, some of my fellow countrymen are just too dumb to see this.