Rao visited the temple in neighbouring Nalongda district and had 'darshan' of the presiding deity Lakshmi Narasimha Swamy, a release from his office said.
The chief minister, who held a review on the development of the temple, proposed that the forest area near Yadagirigutta be converted into a protected area and "spiritual" plants be grown.
The structures lying in a haphazard manner would be removed and private lands in the area be collected by the administration. The two-and-half acres of land around the hill would be beautified to enable devotees to perform circumambulation, the release quoted Rao as saying.
Steps should be taken to see that only activities related to the God are performed at the temple, Rao said.