The ruling YSR Congress failed to get the two bills passed by the Legislative Council last month as they were referred to the select committee at the insistence of the opposition TDP-dominated Upper House.
Civic authorities in Andhra Pradesh capital city of Amaravati on Monday started demolishing unauthorized constructions on the banks of Krishna river.
TDP leader N Chandrababu Naidu is the third high profile arrest or detention of opposition leaders in India after the arrests of Congress leaders D K Shivakumar and P Chidambaram on different charges.
Naidu's son Nara Lokesh, who came out of the house, took strong exception to the police action.
Analysts believe that Jagan Reddy might not dump Amaravati as the state capital is functioning from there for four years and that any move to shift the capital will prove counter-productive for him.
Amaravati had attracted the attention of investors from countries like Australia, Japan, Germany, Singapore and Britain.
The construction of the city, known as Amaravati, is the brainchild of the state's former chief minister, N. Chandrababu Naidu, who lost power in elections in May.
The bungalow in which TDP chief Naidu was staying was built on a six-acre land on the Krishna riverbed.
The 'Praja Vedika'was built by the AP Capital Region Development Authority on the Krishna riverbed near the residence of Naidu, the Telugu Desam Party president and the present Leader of the Opposition.
In their letter to Venkaiah Naidu, the TDP MPs wrote that they were 'inspired and encouraged by the impeccable leadership of Narendra Modi'.