Bystanders look on as an Outside Broadcasting(OB) vehicle is engulfed in flames after allegedly being set alight during a “Million March” rally in Hyderabad.—AFP

HYDERABAD: Police fired tear gas on Thursday at protesters demanding a separate state in southern India, a campaign that could potentially hurt the stability of the governing coalition already struggling with graft scandals.

Businesses were shut in Hyderabad, the capital of Andhra Pradesh state and where global firms including Microsoft and Google have their main India offices, as thousands of protesters, including lawmakers, students and local government officials, took to the streets.

The four-decade-old demand for Telengana state to be carved out of the economically less developed part of Andhra Pradesh gathered momentum last year after the federal government, led by Prime Minister Manmohan Singh's Congress party, accepted it in principle.

But the decision triggered a backlash from those opposed to breaking up Andhra Pradesh, a politically important state which sends the highest number of lawmakers from southern India to the federal parliament, forcing the ruling Congress-led coalition to backtrack.

On Thursday, supporters of creating Telengana took to the streets in a show of force.

A few protesters shouting slogans broke through barricades set up around Hyderabad, prompting police to fire tear gas.

“This march is a warning to the government that people of Telengana will settle for nothing less than a separate state. Arrests and bans can't deter us,” said Lakshma Reddy, a student.