India’s ruling United Progressive Alliance, or UPA, an alliance led by the Congress party, on Tuesday, unanimously adopted a resolution to create a new state by breaking up the southwestern state of Andhra Pradesh, or AP, ending a 50-year campaign for separate state status by people of one of the most under-developed regions in the country.

The new state, called Telangana, whose creation is subject to approval by the AP state assembly and India's parliament, will become the country's 29th state within the next few months, Indian media reported.

The new state will be home to 10 of Andhra Pradesh’s 23 districts and have a population of about 40 million people. The capital of AP, Hyderabad, which is also the state's economic and political hub, will be situated in Telangana, when the new state lines are drawn on the country's map, but serve as the joint capital of the two states for 10 years.

Hyderabad is home to the Indian operations some of the world's largest technology companies such as Google, Microsoft and Facebook.

The Congress party said, on Tuesday, that agreeing to create Telangana “has not been an easy decision,” and appealed to everyone concerned “to extend their fullest cooperation so that [it] can be implemented in … a manner that ensures peace and goodwill and progress and prosperity among all sections of the people of both States,” The Hindu newspaper reported.

Those who support the creation of the new state argue that the Telangana region lacks political clout to influence the AP government. It is claimed that the current state government has been functioning largely in favor of the richer and more influential Andhra region, and that going its separate way is the only solution for Telangana’s woes.

However, the move has drawn criticism from several quarters, mainly because India is inundated by calls from several regional factions and political parties for the creation of new states.

Opponents of the yet-to-be formed Telangana state are apprehensive that affluent Hyderabad could eventually belong solely to Telangana, while Telangana supporters seek more clarity on the future status of the city, sometimes known as 'Cyberabad' for being an information technology hub.

Meanwhile, observers of the longstanding demand say that creating new states is not the solution for India's economic issues and the perennial impoverishment of the country's politically-neglected regions.

“Carving out the new Telangana state will lead to complete chaos in Telangana and its parent state Andhra Pradesh,” R.N.P. Singh, a senior fellow at Vivekananda International Foundation, a New Delhi-based think tank, told International Business Times. “And, in the long run, it will prove detrimental to India’s national integration and federal control on states.”

"Administrative failure is cited as the root cause for demands to create new states. So why can’t the government improve administration instead of cutting them loose?” Singh said, in a telephone interview with IBTimes, on Wednesday.

According to Singh, the Congress-led coalition hopes to gain political advantage by giving in to the demands of Telangana supporters, ahead of parliamentary elections in 2014, and added that the government's decision will lead to a clamor for approval of new states.

Indeed, there is no dearth of appeals before India’s home ministry for the creation of new states.

They include Mithilanchal in the north-eastern state of Bihar, Coorg in the southern state of Karnataka, Saurashtra in the western state of Gujarat, Harit Pradesh in the northern state of Uttar Pradesh, Bundelkhand in the central state of Madhya Pradesh, Gorkhaland in the eastern state of West Bengal, and Bodoland in the north-eastern state of Assam. And, there are several more unofficial demands for the creation of new states across India.

“Demands for the creation of at least eight states are pending, and conceding to the demand to create Telangana has made the center look weak,” Singh said. “It signals India is reverting back to pre-independence days when princely states functioned fairly independently with little central control.”