The Indian government’s unexpected announcement that it is initiating the process to create a new federal state in the Telangana region of Andhra Pradesh has provoked a major political crisis.

Comprised of the ten northwestern districts of India’s mainly Telugu-speaking state, Telangana is home to about 31 million of Andhra Pradesh’s 77 million people.

The state’s Congress Party government is badly divided over the Telangana issue and could fall as a result. More than 75 Congress members of the state assembly—including 20 of the 33 members of the state cabinet—have submitted letters of resignation to protest against the Congress Party-led central government’s decision to launch Telangana on the road to statehood. They have been joined by some 70 opposition MLAs (Members of the Legislative Assembly.)

All 12 Congress cabinet ministers from Telangana, meanwhile, have applauded the decision to make their region, which has long been considered the most backward and poverty-stricken part of Andhra Pradesh, a state.

On Monday, the speaker of the Andhra state legislature suspended proceedings indefinitely after members began chanting rival pro- and anti-Telangana slogans. The legislature had been scheduled to sit until December 23.

Leaders from all three of the state’s major parties, the Congress, the Telugu Desam Party (TDP) and the Praja Rajyam Party (PRP), have led protests and bandhs or strikes in favor of a “united Andhra.” According to a police official, “united Andhra” protests were mounted in 397 towns and villages yesterday. Several took a violent turn.

On Thursday, the leader of the pro-Telangana statehood Telangana Rashtra Samithi (TRS) said his party would resume its agitation for a separate state if the “united Andhra” campaign, which is based in the coastal districts and south-western portion of the state (Rayalaseema), continued. “No amount of police or military violence can stop us,” vowed K. Chandrasekhar Rao.

Earlier this month, Chandrasekhar Rao mounted an 11-day “fast to the death” to press his party’s demand for Telangana statehood. On Dec. 8 and 9, as his health was reportedly fast deteriorating, TRS supporters effectively shut down Hyderabad, the state capital and one of India’s major commercial centers, despite a heavy presence of security forces. By then at least 17, and possibly as many 25 people, had died as a result of clashes with police and suicides in “sympathy” with Chandrasekhar Rao’s fast.

Apparently for fear that the Telangana agitation was spinning out of control, a hastily convened meeting of Congress Party President Sonia Gandhi, Prime Minister Manmohan Singh and other top Congress ministers in India’s Congress-led coalition government decided late on the evening of December 9 to cede before the TRS agitation.

With no warning, let alone advance political preparation, Home Minister P. Chidambaram announced at 11:30 PM that night that the central government was launching the process to make Telangana India’s twenty-ninth state.

This sudden decision has been widely criticized in the Indian press and not just because it quickly revealed sharp cleavages within the political and business elite of the largest of India’s four southern states and threatens to unleash an escalating series of pro- and anti-Telangana statehood protest campaigns. The government’s bowing before the Telangana agitation will, it is feared, encourage numerous other ethnolinguistic and regionally-based movements to step up their own campaigns for separate states. Among the most prominent of these are movements for Vidarbha (comprised of the eastern districts of Maharashtra), Gorkhaland (a majority Gorkha state to be carved from northern West Bengal) and Bodoland (the majority Bodo area of Assam)

The expression “Pandora’s box” has repeatedly been used in newspaper editorials and columns. “Telangana has let the genie out,” declared the Times of India in a December 14 editorial. “The clamour for new states is increasing by the day. Politicians across the country have jumped onto the Telangana bandwagon to push their claims for separate states.”

The Congress Party at the all-India level, the Bharatiya Janata Party (BJP), the official opposition in India’s national parliament, the Andhra Pradesh state-unit of the Congress Party, the TDP, and the recently formed PRP have all previously expressed support for Telangana statehood at election times, but otherwise done little or nothing to put it into effect.

The events of the past the week underscore why. The most powerful sections of the Telugu regional bourgeoisie believe the creation of Telangana will weaken their bargaining power in national politics and are adamant that Hyderabad, which has emerged as a major IT-hub and according to some estimates accounts for 15 percent of India’s export earnings, not be “lost” to Telangana.

In campaigning against Telangana they have sought to rally popular support with appeals to Telugu regional sentiment.

Chandrasekhar Rao, the TRS, and the other proponents of Telangana are determined to make Hyderabad the capital of their state, so as to provide them with the opportunity to cut their own lucrative deals with domestic and international capital. Pro-Telangana activists have reportedly threatened “civil war” if Hyderabad is hived off into a Union Territory.

Chandrasekhar Rao has accused his Congress and TDP opponents of mounting “an agitation of investors.”

But he himself is a typical bourgeois politician. He was a prominent leader of the TDP in the 1990s when the TDP government of Andhra Pradesh was winning accolades from the World Bank for its bold implementation of neoliberal policies. In the 2004 national and state elections he allied his newly-founded TRS with the Congress Party and thereafter joined the pro-big business Congress-led governments in New Delhi and Hyderabad.

Two years later, the TRS withdrew from the national and state governments because of their failure to proceed with the creation of Telangana. In the most recent elections, Chandrasekhar Rao and his TRS were a partner of the Hindu supremacist BJP.

Far from enjoying overwhelming support in Telangana, the TRS won just 10 of the region’s 119 state assembly seats in last spring’s election.

Rao makes demagogic references to differences in socio-economic development between rural Telangana and other parts of the state, but has no program to meet the fundamental problems of the masses of Telangana: poverty, unemployment, the lack of irrigation, and basic public and social services.

Rooted in capitalism and India’s feudal-colonial past, these problems are common to all Andhra Pradesh and India as a whole.

The creation of new states under the rule of the Indian bourgeoisie will only serve the interests of various regional capitalist elites, while, as the recent developments have demonstrated, further stoking linguistic, regional, caste and communal tensions between India’s toilers.

Genuine equality—democratic and social—will only be established through a united movement of the working class and oppressed against the entire capitalist order.