The flag, which he hoisted near his father's grave at Idupulapaya family state in Kadapa district along with his mother Vijayalakshmi, has three colours -- blue, white and green -- with the photo of YS Rajasekhara Reddy in the middle.
The photo itself is encircled by the symbols of all the welfare and populist schemes which YSR had launched during his rule, endearing himself to the poorer sections of the state.
Party leaders said that the blue colour represents the awakening of the youth, white is for peace and the green represents the farmers and the agriculture sector.
Along with the immediate family members, the low key ceremony was also attended by member of Parliament Mekapati Rajmohan Reddy and 11 Congress members of legislative assembly.
The MLAs who were now likely to face the action from the party include former ministers Konda Surekha and B Srinivas Reddy, Amarnath Reddy, M Chandramohan Reddy, Srikant Reddy, Sivaprasad Reddy, Ramachandra Reddy, Babu Rao, K Rami Reddy (all Congress) and Shobha Nagi Reddy from the Praja Rajyam Party.
However, the event was marred by a controversy, since the election commission had asked Jagan not to organise any big meetings on the occasion in view of the model code of conduct in force in Kadapa district in view of Sunday's member of council elections.
Jagan group in a letter to the chief electoral officer of the state clarified that it was a family function restricted to a few people where no speeches would be made.
Jagan said that he will announce the policies and programs of his party after the by elections to the Kadapa Lok Sabha and the Pulivendual assembly constituency. He was likely to contest from Kadapa Lok Sabha seat, which he vacated in November 2010, while resigning from Congress party.
His mother will seek re-election from the Pulivendula assembly constituency.