Agarwal, a reputed businessman, was arrested from his house in the town this morning, police said.
As President of the Club, he had organised the picnic in which 150 persons of 80 families participated. It was his responsibility to ensure safety of the picnickers, police said.
Two boatmen and owner of the vessel have been arrested earlier.
Of the 31 persons killed in the boat capsize, 18 were women.
The state government has already ordered an administrative probe by the Revenue Divisional Commissioner and announced an ex-gratia of Rs 1.5 lakh each for the family members of the deceased.