With the Andhra Pradesh Legislative Council Chairman referring the bills relating to the development of three state capitals to a select committee, the Jagan Mohan Reddy-led government is finding itself in a dilemma over the issue.

A day after Council Chairman Mohammed Ahmed Shariff dealt a huge blow to the government by referring the bills to a select committee, YSR Congress Party started discussing the next course of action.

Chief Minister Y. S. Jagan Mohan Reddy went into a huddle with top party leaders on Thursday to consider the options available to the government.

The government's efforts to swiftly complete the process of decentralization of the state capital by developing Visakhapatnam and Kurnool as the two other capitals received a major setback with Shariff referring the bills to a House panel, despite pressure from the ruling party.

The developments in the Upper House over the last two days became a hot topic of discussion with celebrations breaking out in the camp of the main opposition Telugu Desam Party (TDP) and also among farmers in Amaravati villages, who have been strongly opposing any move to shift the capital from Amaravati.

After the smooth passing of the bills in the Assembly on January 20, the first day of the special session, the YSRCP suffered defeats in the Council both on Tuesday and Wednesday. On the first day, the TDP had its way by getting a resolution passed by the House, disapproving the government's policies. The result was only expected as the YSRCP has just nine members in the 58-member House.

The ruling party was hopeful that the bills will be taken up for voting. Though they were bound to be rejected given the overwhelming majority of the opposition, YSRCP leaders were confident that it will set in motion the process which will ultimately lead to the bills being deemed approved.

The YSRCP used all its strength to ensure that the Bills are not referred to a select committee as the process could be delayed for at least three months. It used as many as 24 ministers to bring pressure on the chairman, who was appointed during the TDP rule but Shariff did not succumb and used his special powers to refer the Bills to a select committee.

The development evoked a strong reaction from the YSRCP, which alleged that TDP chief N. Chandrababu Naidu influenced the chairman. On the other hand, there were celebrations in the TDP camp. Naidu, his son Nara Lokesh, a member of the Council and other TDP leaders joined the Amaravati farmers in the celebrations.

Analysts, however, say the government can still issue an ordinance to go ahead with its three capital process. For this both the Houses of the State Legislature have to be prorogued.

TDP leader in the Council and former minister Y. Ramakrishnudu, however, believes that the governor can use his discretion while approving the ordinance. "He will have to satisfy himself with regard to the necessity of the ordinance and also take into account the circumstances in which the ordinance is being brought," he said.

It will also not be easy as the farmers of Amaravati, who had given 33,000 acres of land for the capital's development in 2015, have filed petitions challenging the government move.

With actor and Jana Sena chief Pawan Kalyan joining hands with the BJP, the Centre may also focus on the developments in the state. Pawan Kalyan and BJP leaders have said that the Centre will not be a mute spectator.

The other option before the government is to abolish the Council itself. However, this process may take months. For this, the government will have to pass a resolution in the Assembly and send it to the Centre. If the Centre accepts the resolution, a Bill will have to be tabled and passed in Parliament.

It is still not clear if Jagan Mohan Reddy will abolish the Council which his late father Y. S. Rajasekhara Reddy had revived as the then Chief Minister of undivided Andhra Pradesh in 2007.

The Council was revived by Rajasekhara Reddy after a gap of 22 years. It was abolished in 1985 by then chief minister N.T. Rama Rao as he felt that the Upper House was proving a roadblock for his policy decisions. The then opposition Congress party had a majority in the Council.

The YSRCP faces a similar situation in the Council as the opposition TDP has 34 members.