The move followed prolonged protests by residents of Telangana, who felt the region had long been neglected.
Telangana, which officially came into existence at midnight Monday 2 June 2014, becomes the country's 29th state.
With a population of 3.5 crore, it comprises 10 former districts of Andhra Pradesh and the city of Hyderabad.
Hyderabad, which forms the joint capital of the two states for the next 10 years, was covered with pink balloons, banners and flags to mark Telangana's statehood, Pink is the colour of the TRS.
"The sacrifice of the youth who led the movement has culminated in the formation of a new state. It is a historic day for Telanaga people."
Kalvakuntla Chandrasekhar Rao will be the first Chief Minister of Telangana with 9 man team in first cabinet.
From the skies to the sidewalks, all are draped in a pretty shade of pink. Cheers of jubilation drift through the air, thick with pride for realizing a long cherished dream. There is a sense of satisfaction too as the days of struggle are, at last, over and finally there is hope of a more fulfilling tomorrow.
To make June 2 a day to remember, for eternity, for those like Rao, workers of Telangana Rashtra Samithi (TRS) have arranged for massive fireworks, exclusively ordered and shipped from Mumbai. The grand 'light and sound' show will be played out for an hour at 120 junctions across the twin cities all through the day. Programmes, showcasing the rich culture of the new state, will also be organized on 100 different stages in the city, even as partymen distribute sweets to passersby at various important junctions across Hyderabad.
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