India's ruling coalition has endorsed the creation of a new state in southern India, a government official said.
The United Progressive Alliance coalition on Tuesday unanimously agreed to endorse the formation of a new state called Telangana to be carved out of Andhra Pradesh state, civil aviation minister Ajit Singh told reporters.
Later, Prime Minister Manmohan Singh's Congress Party decided to approve the creation of the state.
The government has opened a Pandora's box. This will give rise to similar demands from several regions that are fighting for separate states
The large size of some of India's 28 states makes them difficult to administer and has prompted movements to divide them. Telangana would become India's 29th state.
Telangana supporters say the drought-prone northern area is underdeveloped and ignored by powerful politicians from southern Andhra Pradesh. Residents of the 10 districts that form Telangana say they are discriminated against in the allocation of state funds, water and jobs.
The decision is likely to be opposed by the rest of Andhra Pradesh, primarily because the proposed Telangana area would include the state capital and industrial hub, Hyderabad.
The demand for a separate state of Telangana has erupted sporadically since the 1950s, with hunger strikes and violent protests claiming about 1,000 lives over the past decade. Several protesters self-immolated to press for the creation of the state.
The protests gained strength in 2009 when veteran politician K Chandrasekhara Rao began a hunger strike. After 11 days, Prime Minister Manmohan Singh's government agreed to split the state.
The government then delayed a decision while sporadic protests, both for and against the new state, gripped Andhra Pradesh.
Critics of the decision to carve out the state said the move would spur other demands for creating states.
"The government has opened a Pandora's box. This will give rise to similar demands from several regions that are fighting for separate states," said Kalyani Shankar, a prominent political commentator.
Several parts of India - the Bundelkhand region in the central state of Madhya Pradesh, Vidarbha in western Maharashtra state and Gorkhaland in the eastern West Bengal state - face similar statehood movements, but the government has not made any moves to create states there.