I was reading the BBC on Thursday and was surprised to find that India is going to create a new southern state out of the existing state of Andra Pradesh. I knew that at least one new state had been created in the last decade (the actual number is 3: Chhattisgarh, Uttarakhand, and Jharkhand). I didn't think much of it, but my interest was piqued and so I read the article. To be completely honest, I don't have a strong opinion on the subject, except for one thing: Hyderabad is going to be the capital of the new state. Hyderabad is a very important Indian city. It's kind of like an Indian Silicon Valley and several Fortune 500 companies have their offices there. It's a prosperous, modern, and hi-tech city.
Now some background. After reading the article about Telengana on Wikipedia, it seems that when the states of India were being re-organized along linguistic lines by the State Reorganization Committee, they were not in favor of merging the Telengana region with the Andra region due to economical disparities. The Central government decided to ignore the SRC recommendations and performed the merger anyway (perhaps using the reason that both areas spoke Telugu, and so there was no reason to split them). As was to be expected, over the past few decades, the Andra region has prospered whereas the Telengana region is still economically underdeveloped.
It would seem that in principle, there needs to be a separate state. However, I'm not so sure of the wisdom of handing over Hyderabad to a fledgling state. It will take time to create a new state-machinery and I think that Hyderabad could suffer in the process. In addition, the city is going to a state with an untested and nascent administration (obviously, because it's a brand new state). So... maybe not such a great idea. On the general topic of creating more states in India (as a result of the imminent creation of Telengana, many other groups are agitating for their own states) I don't really have a well-formed opinion. Maybe it's a good thing - you can have more focused state-administrations and better management. However, the side-effect is increased fragmentation. The last few governments in India have been coalition governments formed with the support of regional parties. Creating more states is probably going to create even more regional parties and it's not going to help the situation.