Birbhum police arrested Sahidul Alam alias Phulbabu, the Trinamool Congress vice president of Uchkaran gram panchayat, from his home on Thursday night. He was arrested following allegations of extorting money from a local resident in exchange for providing a house under the Awas Yojana housing scheme.
Acting on complaints that money was taken from a resident for the housing scheme, police reached the spot and conducted a raid.
Authorities took the panchayat vice president into custody from Uchkaran village in Nanur.
The arrest sparked a political controversy in the area.
The family of the accused Trinamool leader denied all allegations, claiming he became the victim of a political conspiracy.
Nanur police are continuing their investigation into the matter.