Last night's announcement came after the agitation by Telangana Rashtra Samiti intensified in the state and the health of its leader, Rao, deteriorated.
Home minister P Chidambaram today said he has invited TRS chief K Chandrasekhar Rao here to discuss the next step for formation of a separate Telangana state.
"I am happy to inform the House that by and large normalcy has been restored in Hyderabad," Chidambaram told the Rajya Sabha.
He said Rao had spoken to him this morning and thanked all sections of the House for resolving the issue.
"I have invited Rao to Delhi to discuss the next step", the home minister said.
Earlier, senior BJP leader M Venkaiah Naidu took exception to Chidambaram announcing the Telangana decision outside Parliament though his party welcomed carving out Telangana from Andhra Pradesh.
Naidu said the government was taking Parliament lightly by announcing policy decisions outside and it was not only the question of privilege but a propriety of the House.
Chidambaram said he could not have waited to make the announcement on Telangana as the government could "brook no delay" against the backdrop of the situation in the state.
In any case, he said what was announced late last night was a "re-statement" of the earlier decision of the government.
After hectic consultations prime minister Manmohan Singh had with his senior ministerial colleagues yesterday, Chidambaram had announced last night that the process for formation of Telangana state would be initiated and appropriate resolution moved in the state assembly.
He had also requested chief minister K Rosaiah to withdraw cases against leaders, students and others who had participated in the agitation.
Last night's announcement came after the agitation by Telangana Rashtra Samiti intensified in the state and the health of its leader, Rao, deteriorated.
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