The strike in the Congress party stronghold of Andhra Pradeshcame as Corporate Affairs Minister Murli Deora offered to resign and a diatribe against homosexuals from another minister, Ghulam Nabi Azad, further embarrassed the government in a day of turbulence indicative of growing political chaos in Asia's third largest economy.
On Monday, nine Congress MPs from Andhra Pradesh resigned from the parliament over the party's failure to take a stand on the four-decades-old demand to declare Telangana a separate state.
Activists pushing for Telangana to become India's 29th state, called the strike and authorities deployed more than 13,000 police and paramilitary troops in Hyderabad, in a bid to prevent a repeat of pro-independence protests in March that turned violent.
Sporadic incidents of violence erupted in the city and nine other districts as protesters attacked vehicles, shops and factories, with businesses and educational institutions shut and public road transport suspended.
Singh has already been hit by a series of corruption scandals this year and the latest controversies will add to a sense of drift in India, further paralysing reforms from land acquisition to tax streamlining.
Activists want the new state carved out of Andhra Pradesh, one of the country's biggest states. State capital Hyderabad is home to the Indian headquarters of global firms such as Microsoft and Google.
The resignations - which still need to be accepted by the government - could halve the government's rough majority of 18 only weeks before a new parliamentary session starts on Aug 1.
Media said more MPs had threatened to quit over Telangana.
Just when Telangana came to the boil, two other controversies surfaced.
"TORRID TIME"
Cabinet minister Deora offered to resign, according to government sources, citing personal reasons.
He has come under scrutiny after a state auditor criticised the oil ministry - which Deora used to head - for allowing exploration companies to overstate costs.
The party had yet to formally discuss the resignation, a Congress spokesperson told reporters.
Health Minister Ghulam Nabi Azad heaped more embarrassment on the government by saying late on Monday, at a conference attended by Singh, that homosexuality was "a disease which has unfortunately come to our country".
"Congress is going through a torrid time, of that there is no doubt," said Vinod Mehta, editor of news magazine Outlook.
"Telangana accentuates and emphasises the kind of turbulence the party is facing all over the country ... At the moment it has many fires to put out. And on top of all this, the PM's reputation and credibility has been eroded."
Government survival is so far not under threat. The opposition is weak and does not want a snap general election halfway through Singh's second term.
But Telangana joins a list of issues unresolved by a rudderless Congress that includes archaic taxes and foreign investment rules that have spooked investors.
Singh was re-elected in 2009 with a greater majority, but since then his government has faced one storm after another, including India's worst ever corruption scandal in which up to $39 billion was lost in kickbacks for telecom licenses.
The government's foot-dragging over Telangana -- it approved the new state in principle last year, but changed its mind after criticism from the opposition -- adds to a slew of corruption scandals and a failure to curb high inflation that forced Singh to refute accusations that he was a lame duck.
If the resignations of the Andhra assembly lawmakers are accepted, Congress would lose its majority there.
"Cong mess now adds Telangana to its menu", The Economic Times blazed on its front page on Tuesday.
Independence activists say the Telangana region has been neglected by successive governments and trails other regions in terms of development. They called for a 48-hour strike to press their demands shortly after the lawmakers resigned.
A cartoon in the Hindu newspaper depicted Singh and Congress president Sonia Gandhi being singed by a Telangana fire as they stepped out to open parliament.
Congress holds 32 of the 42 parliamentary seats from Andhra Pradesh, making the state one of the most important in a general election.
India has 28 states and carved out three new ones in 2000. Besides Telangana, there are demands for new states in western and eastern India.
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