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While the ruling National Conference has described the move as a landmark decision, the Bharatiya Janata Party has sought dismissal of the state government calling the policy "an anti-India and pro-separatist development".
The BJP has strongly condemned the cabinet decision of approving the rehabilitation policy.
"This government stands completely exposed for its anti-India and pro-separatist activities. The state governor should dismiss this government without any delay as it has become a security threat for the state and country," senior BJP leader Ashok Khajuria told a leading local daily.
The NC, on the other hand, has hailed the rehabilitation policy and said that its the most effective confidence-building measure to provide relief to the families that have been waiting since long for the return of their kith and kin.
"The state and Union government deserve our full support and appreciation for having facilitated the proposal of Jammu and Kashmir Chief Minister Omar Abdullah and thereby exhibited clear manifestation of their coordination efforts in restoring peace and prosperity in the state," a spokesman of the ruling party said in a statement.
Interestingly, the state Congress party, which is an ally in the coalition government, has maintained a discreet silence over the issue.
Meanwhile, the state home department has issued a notification laying down the procedure that will facilitate the return of former terrorists, who had crossed over to the PoK between 1989 and 2009. The notification said that the former militants permitted to return under the proposed policy will be permitted to enter only through Joint Check Post Wagah, Attari or through Salamabad or Chakan-da-bagh crossings on the Line of Control or through the Indira Gandhi International Airport in New Delhi.
After completion of the formalities at the crossing points, the returnees and their dependents will be escorted to Jammu and Kashmir and the district authorities will be duly informed. A record of their entry into India and to Jammu and Kashmir will be maintained by the immigration authorities at the crossing point and by the state intelligence respectively.
The wives, children and other dependants of those returnees who have married in PoK or Pakistan between 1989 and 2009, will be considered for entry into the country as per the existing laws of the land and the necessary certificate for entry will be issued to them.