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Talks between Andhra Pradesh authorities and around 30,000 striking electricity workers failed to resolve their grievances over establishing the new state of Telegana.
The failure left millions of people in south-eastern India facing widespread power blackouts for the sixth consecutive day.
The workers have shut down power plants across Andhra Pradesh state for almost a week to protest against a decision to divide the state into two, creating Telangana.
They are among many thousands of people in Andhra Pradesh who have gone on strike over the new state, saying it will divide Telugu-speaking people, lead to cuts in the state budget and create problems with water resources.
Chief Minister N Kiran Reddy, Andhra Pradesh's top elected official, held two rounds of talks with the leaders of the utility employees' union, but the workers remained adamant that they would not call off their strike.
The workers are demanding the federal government withdraws last week's Cabinet decision to build the new state of Telangana with 10 districts out of Andhra Pradesh's 23 states.
Separately, more than 600,000 state government employees opposed to the division and have been agitating for a united Andhra Pradesh for nearly two months.
With workers shutting down several state-run and private power plants, most of the state went without electricity for long hours yester.
Scores of freight and passenger trains were cancelled.
Hospitals and drinking water utilities were operating with generators and mobile phone services, petrol stations and other businesses were affected by power cuts.
Power supply to the adjoining states of Tamil Nadu and Kerala was also hit, raising fears that the southern electricity grid could collapse totally.
The demand for a separate state of Telangana has erupted sporadically since the 1950s, with hunger strikes and violent protests claiming about 1,000 lives over the past decade.
Several protesters self-immolated to press for the creation of the state.
Telangana supporters say their drought-prone northern area is underdeveloped and its residents feel discriminated against in the allocation of state funds, water and jobs.
