Hyderabad, India - The Indian cabinet's decision to create the new state of Telangana by splitting the southern state of Andhra Pradesh has triggered two sharply contrasting reactions.

In Telangana region, including the state capital Hyderabad, celebrations have been continuing since the cabinet decision on Thursday.

People living in other parts of Andhra Pradesh, however, were decidedly unhappy with the government's decision and have been protesting, sometimes violently.

The creation of the new administrative area is a rebirth for Telangana state, which was merged with the coastal Andhra region to form Andhra Pradesh state in 1956.

A massive crowd of Telangana supporters from different communities gathered in front of the state assembly in Hyderabad, lit candles and paid tribute on Friday to the more than 300 people who died in 1969 during demonstrations pushing for the split.

On the other side of the issue, anger erupted in the Rayalaseema and coastal Andhra regions, jointly called Seemandhra.

Thousands of opponents of the split called a strike and went on a rampage that included burning police cars and property, causing security forces to fire tear gas and wade into crowds of demonstrators with batons on Friday. Houses of federal ministers and leaders of the ruling Congress party became targets. A screaming mob attacked the house and businesses of state Congress president B Satyanarayana in Vijayanagaram city.

Protesters also burned effigies and photos of Congress President Sonia Gandhi, who is seen as the main force behind the decision. Even statues of Congress icons and former prime ministers Indira Gandhi and Rajiv Gandhi were set ablaze.

Differing reactions

The decision by India's cabinet marks the beginning of a long political and administrative process. It will end with the Indian Parliament passing a law creating the new state, possibly in November. While Telangana state will comprise 10 districts and 35 million people, the other 13 districts with 50 million people will remain in the state of Andhra Pradesh.

Supporters of the split say their regions were divided by geography, culture and history. Even the Telugu language is markedly different between the two regions.

Hyderabad, a hub of tech companies in India, will be the joint capital of both states for 10 years. After Andhra Pradesh builds its own new capital, Hyderabad will serve as the capital of Telangana.

About 400,000 government employees and teachers opposing the division have been on strike for nearly two months to oppose the creation of the new state. Their protest started after the ruling Congress party decided on July 30 to go ahead with the split. Tax collection has been at a standstill since then.

"The strike has caused a revenue loss of more than 3,000 crore rupees ($500m)," Anam Ramnarayan Reddy, the state's finance minister, told Al Jazeera. The state-owned Road Transport Corporation has been on the verge of bankruptcy.

"We have also closed the national highways linking our state to Bangalore and Chennai. No vehicle is allowed to move," said Ashok Babu, a prominent leader of the protests.

A 72-hour general strike called by opponents of Telangana's creation was marred by sporadic violence. Protesters also stopped trains by sitting on tracks in various parts of Seemandhra. Many parts of the state were plunged into darkness as power generation came to a halt at a major thermal plant because of the strike.

In Hyderabad, officials witnessed a strange spectacle. While half of the government's employees from Telangana were dancing to drums, the other half from Andhra were in mourning. With the situation threatening to slip out of control, the federal government sent more security forces to ensure peace.

Water wars



The decision over Telangana has also left the ruling Congress party divided in Andhra Pradesh, paralysing the administration. Six federal government ministers from the coastal Andhra region have announced their resignations, while six MPs said they were quitting the Congress party to oppose the creation of Telangana.

"The cabinet decision is undemocratic. I am forced to quit the Congress party, which I have served for [the] last 40 years," MP V Arun Kumar told a press conference soon after the cabinet decision.

Political and business leaders as well as ordinary people in Seemandhra opposed the division, fearing the loss of jobs and business opportunities. Sharing water of the region's two big rivers has also become a major cause of concern for the agrarian economy of the Andhra region.

"Division of the state will lead to water wars between the two states in future," warned Andhra Pradesh Chief Minister N Kiran Kumar Reddy.

Leaders from Andhra also argued that division would endanger the security and jobs of the nearly three million people originally from their region now residing in Telangana.

Hyderabad city was also a big bone of contention, as 70 percent of state revenues are generated in this metropolis of nearly 10 million people.

Exploitation?



Telangana supporters, on the other hand, dismiss these objections. "They basically want to continue the exploitation of Telangana for their economic benefit," said K Chandrasekhar Rao, president of the regional Telangana Rashtra Samiti party. "What they are saying upholds our grievances that they have taken away our rightful share of waters, employment and other resources over so many decades."

Rao, 59, has been at the forefront of the Telangana state independence movement since 2001.

Officials say a group of 12 federal ministers will deal with all the contentious issues, including sharing of water and other resources and ensure fair distribution.

With federal officials asserting the decision to divide the state was final, supporters are confident that Telangana will emerge as the 29th state of India well before general elections in 2014.

The last time India saw the birth of a new state was in 2000, when the northern states of Bihar, Madhya Pradesh and Uttar Pradesh were divided to create Jharkhand, Chhattisgarh and Uttarakhand.

Some observers say Telangana's birth may intensify demands for greater autonomy by other smaller states in the north and northeast of the country in the run-up to next year's elections.