The digging work for the foundation of the statue started about four days ago following which Samajwadi Party leader Azam Khan went to the spot along with his supporters yesterday.
He hit out at the administration for allowing the work, alleging that the permission was given in violation of high court's orders on the installation.
"The district administration's permission to dig foundation for the statue's installation was in violation of the orders of the Supreme Court, high court and the state chief secretary," Khan claimed.
A bust of the BJP ideologue stood at the same spot during the previous BJP government. It was removed in 2005 after the Samajwadi Party grabbed power in the state.
Minister of State for Minority Affairs Baldev Singh Aulakh vowed to have Upadhyay's statue erected.
He also lashed out at Khan, alleging, "Those who have become a symbol of oppression and dictatorship are now demanding implementation of the court's orders.