Daman and Diu and Dadra and Nagar Haveli will be merged into one, the minister said.
Two Union Territories -- Daman and Diu, and Dadra and Nagar Haveli -- will be merged into one and a bill in this effect will be tabled in Parliament next week, Union Minister Arjun Meghwal said in the Lok Sabha on Friday.
The move comes three months after Jammu and Kashmir was bifurcated into two UTs -- Jammu and Kashmir, and Ladakh.
The Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories) Bill 2019 is part of the proposed government business for the next week, Mr Meghwal said.
Officials said the merger of the two UTs, located along the western coast near Gujarat, will be done for better administration and check duplications of various work.
So far, both the UTs have separate budgets and different secretariats even though they are just 35 km apart.
Dadra and Nagar Haveli has just one district while Daman and Diu has two.
The merged UT is likely to be named as Dadra, Nagar Haveli, Daman and Diu and its headquarters could be Daman and Diu.
On August 5, the central government had announced the abrogation of the special status given to Jammu and Kashmir under Article 370 and its bifurcation into two UTs.
The country currently has nine UTs after the creation of the UTs of Jammu and Kashmir, and Ladakh. However, with the merger of Daman and Diu, and Dadra and Nagar Haveli, the number of UTs will come down to eight.