Notwithstanding pressure from pro-Telangana groups, the Centre may not take any decision on the demand for the separate state during the ongoing Budget session of Parliament, which will continue till May 10.
A government functionary said internal consultations within the government and the Congress party have been going on and so a decision during the Budget session is not likely.
As the government would try to push through crucial financial business during the current session of the House, it does not want any disruption, he said.
"We have to take a decision either way before the 2014 general elections. But we do not want to take any decision on such a sensitive issue when the session is on as it may lead to disruption of Parliament," the government functionary said.
The government is also wary that any hasty decision on Telangana could fuel the separate statehood demands in other parts of the country.
The Gorkha Janmukti Morcha has recently asked the government to consider its demand for a Gorkhaland state if it takes into consideration creation of a separate Telangana.
However, making a strong pitch for separate Telangana, NCP chief and agriculture minister Sharad Pawar has conveyed to Prime Minister Manmohan Singh that a delay in the matter would not be helpful.
Pawar said he raised this issue with the prime minister, becoming the first UPA-constituent to openly come out in support of an early decision on Telangana.
A decision on the Telangana statehood demand was deferred on January 27 with the Centre and Congress saying there was need for "further consultations" which will take a "little more time" even as pro-Telangana activists intensified their agitation.
On the eve of the one-month deadline set by him to arrive at a decision on the contentious issue, Shinde and Congress spoke on similar lines seeking more time to resolve the matter.
While Shinde said it may take some more time to reach a final decision, Congress General Secretary in-charge of Andhra Pradesh Ghulam Nabi Azad made it clear that "further consultations" with leaders from Andhra Pradesh were required.
Shinde had on December 28, last year said the Centre would announce a decision on the contentious issue in a month.