Separatist groups in the region had opposed the project, with some likening it to Israeli settlements within Palestinian territories.
The party, which shares power with the BJP in Jammu and Kashmir, said Madhav's comments should evoke positive response from all those interested in ending the stalemate in the state.
Bharatiya Janata Party (BJP) legislature party will be meeting on Friday to deciding on extending support to Mehbooba Mufti as next Chief Minister.
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