In 1985, NT Rama Rao, the legendary actor and influential chief minister of Andhra Pradesh, initiated a major beautification and road works project in the capital city of Hyderabad. The Buddha Purnima Project included the erection of 34 life-size statues of luminaries of regional public life, arts and culture.

NTR himself was a towering figure who embodied the post-colonial Telugu identity, suffused with linguistic pride and the newfound confidence of the wealthy mercantile and agricultural class of coastal Andhra Pradesh. His screen success in the early fifties ran parallel to the agitations for a Telugu state, which forced the reorganisation of the Indian Union on linguistic lines. AP was finally created in 1956, eight years after the princely state of Hyderabad was integrated into the Indian union. AP consisted of three regions – northern Telangana, coastal Andhra and southern Rayalseema, the latter two collectively referred to as Seemandhra.

One of the icons of coastal Andhra was Sir Arthur Cotton, the British engineer credited with building the dams on the Krishna-Godavari waters in the nineteenth century that heralded an era of great prosperity for the region. In March 2011, protesters demanding statehood for Telangana brought down his statue. Another victim of the ire of the crowd was the statue of Telugu writer, Guruzada Appa Rao, whose literary legacy remains a fine example of an alternative narrative of colonial modernity.

Since the 1940s, the people of Telangana have periodically risen to demand their rights, and a separate state, accusing their leaders of bias and willful disregard. Apart from a historic grouse regarding water resources, there is the breaking of the ‘Gentleman’s Agreement’ protecting Telangana from discrimination.

When the Rajya Sabha assed the bill to bifurcate AP to create India’s twenty ninth state, Telangana last month, crowds gathered at Osmania University, a focal point of the agitation, and several employees of the municipal corporation celebrated with firecrackers, sweets,and shouts of “Jai Telangana”.

Hyderabad will be the joint capital of the two states for 10 years, after which it will become a part of Telangana. While there is some disagreement on the special powers given to the governor in the interim period, the process of apportioning the bureaucracy, searching for administrative quarters and mundane exigencies has begun.

‘The first bureaucrat of Andhra Pradesh’, VK Rao, a grand old man of 99 years, has lived in Hyderabad since 1956. A former chief secretary of AP, he is perhaps the oldest surviving ICS officer in the country. His first reaction is concern over the administrative hierarchy: “Having a common governor is not a feasible arrangement”.

But he believes that the creation of the new state is a correction of a historical wrong: in 1955, the States Reorganisation Commission recommended a separate Telangana state, given the distinct composite culture of the region. It was only after Indira Gandhi’s insistence on the state remaining united following violence in 1972-73, that Seemandhra businessmen began to make investments in Hyderabad, he says.

Today, Hyderabad’s real estate magnates, private education entrepreneurs and infrastructure giants are predominantly from Andhra. They include groups like GMR and GVK, who have seen rapid expansion,  and Nagarjuna Construction Company and Lanco, led by L Rajagopal, the MP who gained notoriety for squirting pepper spray in parliament.  For decades, people from Andhra have also dominated the state’s politics and culture through media organisations (such as Eenadu), and through films, television and cultural organisations, a process facilitated by NTR.  The Telugu film industry has previously threatened to relocate out of Hyderabad.

The Telangana agitation resulted in a downturn for business, real estate and consumption in Hyderabad, noted Gautam Pingle, a former Dean of Research and Consultancy of Administrative Staff College of India. It is now incumbent on the new administration, and the people, to re-ignite Hyderabad as an engine of growth, “and take things forward”, he said.

The fear that Andhra businessmen will move their funds away may not be warranted, contended B Narsing Rao, a former communist party member who has been associated with the pro-Telangana agitation since the late 1940s. Andhras may in the short term be displeased with the challenge to their control of the city, but over time, he believes, “there will not be any animosity” between the Andhras and the people of Telangana.

His son, Vijay Burgula, an independent researcher and staunch pro-Telangana activist, hopes that impending statehood will put an end to the culture of dubious land deals in Hyderabad. Over the last decade, there have been widespread allegations of high-profile land grabs. The formation of a new state, with a new administration, could halt this, he said.

The creation of Telangana state may also present new opportunities for Muslims, who form 41 per cent of Hyderabad’s population, said Mohammed Ayub Khan, a researcher in the department of Politic Science at McMaster University in Canada. A rich, syncretic Indo-Islamic culture flourished in the erstwhile state of Hyderabad, but the fall of the Nizam saw widespread retributive violence against the community, not to mention discrimination, loss of employment and other challenges.

In an attempt to correct these wrongs, the Telangana Rashtra Samithi, whose political fortunes were made on the back of the historic agitation for the new state, has promised Muslims employment, reservations and the post of deputy chief minister. “Muslims are eagerly watching if these promises will be fulfilled,” Khan says.