With byelections in 18 assembly constituencies due next month, the CBI's move will hardly leave Jagan Mohan Reddy cash-starved. But it may stoke sympathy for Reddy, who broke away from the Congress to form his own party which he claims is the inheritor of Rajasekhara Reddy's legacy.
On Tuesday, the CBI froze the accounts of Jagan's media entities with the Oriental Bank of Commerce and State Bank of India as part of its investigations into the wealth of the Kadapa MP and head of the YSR Congress party.
Jagan, who was campaigning at Anantapur, seemed unfazed by the CBI action and said he was prepared for such a development.
Meanwhile, the Sakshi Group of companies, owned by Jaganmohan Reddy, filed a petition on Wednesday challenging CBI's move.
Jagati Publications, which publishes Telugu daily Sakshi and Indira Television, which runs the 24-hour Telugu news channel Sakshi, urged a CBI court to defreeze their bank accounts. The petition alleged that the CBI action had endangered the livelihood of 20,000 employees.
The court directed the CBI to file a counter and adjourned the hearing to Thursday.
CBI, whose probe is at the instance of the Andhra Pradesh High Court, has accused Jagan of amassing wealth by leveraging his father's position as chief minister to raise money from industrialists in a political favours-for-equity quid pro quo. He denies the accusation.
A Congress leader loyal to Jagan said on condition of anonymity that the cabinet which issued orders that supposedly helped Jagan amass cannot be left untouched by the investigation.
"The problem with the Congress is that it is trying to propagate a very obnoxious theory that YS Rajasekhara Reddy is honest but Jagan is corrupt. And that all the Congress ministers are honest but the 26 government orders issued by the cabinet are tainted. This thesis is unable to convince the people and CBI's actions will only boomerang on the Congress which will lose heavily in the by-polls," he said.
If Jagan wins the majority of seats in the bypolls, the Congress government in the state will be in trouble and that's the reason it wants to take swift action against Jagan, he added.
In addition to Jagan, Aurobindo Pharma, Hetero Drugs and Trident Technologies are among the 13 who have been named as accused.
Nageswar, the independent legislator, said that the CBI probe will not have an adverse impact on the political prospects of Jagan.
"People don't think there was no corruption during YSR's time. People acknowledge the fact that there was massive corruption. But people are not morally outraged and ask 'Who is not corrupt?'"
According to G Haragopal, a former head of the political science department at Hyderabad Central University, there is a widespread goodwill for Rajasekhara Reddy because of the welfare programmes he started.
"Farmers and rural population feel that YSR had given them a lot of relief. Since there is no other strong leader filling up the vacuum, people may opt for Jagan and they view the CBI probe as revenge by Congress for rebelling against it."
N Jaya Prakash Narayan, president of Lok Satta party, strongly supported the actions of CBI against Jagan, which according to him were in the direction of strengthening democracy.