There is a report by Sri Krishna Committee regarding the issue. The committee has distinguished representation from outside the state(to avoid any complaints of foul play) with Justice Sri Krishna as head, a retired senior bureaucrat as Secretary and three academics as members.
Sadly, nobody including the political leaders want to go through it. The report clearly analyses the development of each region of Andhra Pradesh and even addresses some claims by both sides. They have toured all places in the state and met leaders of all communities, regions and groups like NGOs, teachers and students. Many of these groups made claims and some asked the committee to simply ascertain facts on a wide range of issues like economy, culture and water. After all the study and conclusions on the development seen in each region, they suggested that the best option for the state is to stay together and made recommendations for the steps to be taken to address the real issues involved.
They have listed the other options(a total of 6) in order of merit and their repercussions and the ways to handle the situation in each case.
http://mha.nic.in/pdfs/CCSAP-REPORT-060111.pdf
This simple non-controversial report is made 'controversial' by politicians who labeled it as a time-pass committee. The fault is with the government and intellectuals who let this narrative fly.
For those who are not into reading reports, this is what I absorbed from it:
1) Among a lot of hogwash regarding the 'exploitation' of Telangana, there are two most important real issues.
a) The political representation of Telangana in powerful ministries has been less in the history of the state. For example, Telangana chief ministers have been ruling the state only for little over 10 years. There is further analysis on this question, but the point seems to be that even though the powerful Home ministry of the state was with Telangana for more that 3/4 of the period, the proponents of Telangana never mention this. However, chief ministers tend to play like they are all the government. The wierd part is that the largest number and longest terms of CM post were held by Rayalaseema which has only 20% of the population.
b) People of Telangana are insecure about their jobs, or more appropriately state government jobs which are in their region. The fear is that since people from Coastal Andhra are more well-educated, they will corner all jobs. The earlier movement in 1960s was because the jobs in Hyderabad were also being given to people from other parts of the state. Senior posts in state bureaucracy don't see balance by region.
2) Hyderabad is THE issue after water.
3) The most screwed up region is Rayalaseema in all ways from percapita GDP to irrigation to education and not Telangana.
The committee's conclusion seems to be: 'If it is working fine, then why do you want to screw it up?'.
My impression is that there would be no Telangana issue if Hyderabad was not this developed. In the run for a developed city, other regions of the state got neglected(though seen objectively, the state as a whole saw very good development). Now Telangana people ask that they are underdeveloped despite having Hyderabad. The rest ask what will they have if Hyderabad is gone. The capital city which contributes to 40% of revenue used to support all the three regions. Now if one region is to have the entire cake, of course the others are not going to be calm.
And obviously, the proponents create propaganda which is way beyond the ground reality and sometimes touch upon the realm of falsehoods. The more dangerous component of the movement is the way everything 'Seemandhra' is evil for some activists. And this is the most tragic part of the division of the state, not the division as such. There might be history text books tomorrow about the 'exploitation'. Thankfully Congress siezed the issue from these hardcore activists.
The movement sort of caused a cultural revival in Telangana, celebrating the age old cultural aspects of the region, which is a welcome change when we are fast forgetting our traditions. But again, there are some radicals who are bent upon cultural purity. The TRS(at least the cultural wing and KCR personally) especially seems to be taking classes from DMK's purity movement, to the point of imitating them. KCR one remarked that the traditional Hindu marriages did not have tying the knot as a practice. Then there are people like his daughter who insists that Telangana tradition is as old as the Tamil tradition, clear signs that they are at least reading DMK's literature though they may not practise it.
So it is time for Congress to immediately announce a division. My guess is that they will do the division against what the purists want. Probably a couple of extra districts thrown into the new state and may be even Hyderabad as a joint capital. That will shut BJP up, the 'champion of small states'. All they want is a small state, they should not complain about the composition. It is an irony that the Congress which started all the mess seems now to be the only sensible party. They are at least thinking about both sides. All others want to mess it up in hopes of winning one more MP seat.