India has throngs of bogus holy men but few are as successful or controversial as Chandraswamy, 47, who looks like an over-fed werewolf. Wearing white robes and with golden talismans clanking around his neck, the hairy "godman", as the Indian press calls him, was led off by police to Tihar jail, one of the most violent prisons in Asia.
The swami's arrest is also a measure of how far the prime minister himself has fallen. Until now, Mr Rao's patronage has given Chandraswamy far greater protection from the law than any sorcerer's talisman. But with Mr Rao's Congress party facing defeat in parliamentary elections, which end on 9 May, Chandraswamy's spell of invulnerability is fast fading.
It was a lowly chief magistrate in New Delhi who finally had Chandraswamy arrested, after Supreme Court justices and cabinet ministers had tried in the past - and failed. They were blocked by the Central Bureau of Investigation (CBI), similar to Britain's MI5, which is under Mr Rao's control.
"The CBI, which operates directly under the prime minister, had been dilly-dallying on the investigation due to the government's lukewarm attitude," said chief metropolitan magistrate Prem Kumar. "Such people who felt they were beyond the clutches of the law are now facing prosecution. Such people are no longer untouchable."
If the magistrate had been as scathing about the prime minister just a few weeks ago, he would have found himself banished to the guerrilla- infested jungles of the North-east as punishment. As one Supreme Court lawyer said: "This magistrate wouldn't have had the guts to do this before. He realises that Rao is a setting sun."
What finally brought the jet-setting swami into a nose-dive was an eight- year old complaint made by a British-based Indian pickle merchant. Chandraswamy allegedly cheated the businessman, Lakhu Bhai Pathak, out of $100,000 on the false promise that he would use his government influence to obtain a newsprint contract.
Bail was denied for the swami but he is expected to plead poor health in hopes of being moved out of an over-crowded jail cell in 105 degree heat to an air-conditioned hospital.
In Madras, where he was arrested on Thursday night, Chandraswamy wailed to the judge: "I am surprised I have been arrested. I am unwell." The swami was then flown to New Delhi, made to appear in court and sent to jail.
The prime minister, campaigning for the third and final round of India's elections, refused to comment on his guru's arrest. Mr Rao and the swami had been friends for 27 years, and when Mr Rao became prime minister in 1991, Chandraswamy was accorded better access to him than even cabinet ministers; only the guru's Mercedes-Benz was allowed into the driveway to the premier's mansion, earning him the nickname "Mr Rao's Rasputin". The guru often boasted that the prime minister called him every day.
Known as a "tantric", a kind of sorcerer who relies on incantations and mystical diagrams, Chandraswamy has made previous accusations against him vanish into the air. The previous minister for internal security, Rajesh Pilot, alleged last September that Chandraswamy had harboured a gangland assassin.
Soon after making the charges, Mr Rao cast Mr Pilot into the political wilderness, making him minister in charge of forests and environment. Reports that the guru had acted as a bagman for an industrialist, who allegedly passed on pounds 460,000 to the prime minister, were never chased up by police. In February, the CBI, probably at Mr Rao's prodding, insisted that the case against the holy man be closed.
The Supreme Court, which lately has been the one lone voice against government corruption, refused to drop the cases against the notorious guru. In an unprecedented move, the court also criticised the CBI for its bias towards the guru; the CBI director, according to some reports, was an occasional visitor to the Chandraswamy's ashram.
Chandraswamy's intrigues go beyond India. Among his devotees are said to be some very eminent people, including businessmen, stars of stage and screen and a pair of African presidents. Acquaintances claim that the supernatural powers of which Chandraswamy boasts - mind-reading, prediction and spell-casting - pale beside his ability to dupe his followers through flattery and appeals to their greed.
"I have never done anything wrong," he once protested, "Can the clouds ever eclipse the sun? They will ultimately scatter and truth will prevail." In India, plenty of politicians are dreading the day when the truth about their links to the "godman" finally shine through.