The inclination to consider the demand in the top echelons of the government came following continuous protests by both Congress and TDP MPs from the Seemandhra region and opposition to any division of Andhra Pradesh, sources said.
However, a decision has not been taken on it, they said.
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Such a move would also assuage the feeling of deprivation among the people of Seemandhra region after the Centre's decision to create Telangana by carving out of Andhra Pradesh and making Hyderabad joint capital only for 10 years, sources said.
"Many people in Seemandhra region think that if Hyderabad is made a Union Territory and the joint capital of the two states, their interests would be protected. Hence, we may consider the demand," a source said.
Yesterday, Home Minister Sushilkumar Shinde had said a note for initiating the process of carving out Telangana would be presented before the Union Cabinet in the next 20 days.
The Cabinet, after giving its approval for creation of Telangana, is expected to set up a Group of Ministers (GoM) to go threadbare into issues arising out of the bifurcation of Andhra Pradesh.