Rao's son Prabhu lit the funeral pyre at the farm house located near Chevella in the afternoon. Policemen presented a gun salute as the cremation was conducted with full state honours.
The body was earlier taken there in a cavalcade from the city. It was kept at the office of Telugu film chambers to enable film personalities and fans to pay their tributes.
Naidu, accompanied by some of his cabinet colleagues, flew down from Vijayawada to pay tributes to Rao.
"Narayana Rao's death is a loss not only to the film industry but also to all Telugu people," he said.
Recalling that he had been associated with Rao since their younger days, the chief minister said the departed filmmaker and his family members treated him with affection.
Rao, who directed super-hit movies with legendary actors like N T Rama Rao and Akkineni Nageswara Rao, passed away at a private hospital here yesterday at the age of 75.
The veteran filmmaker was also a politician and served as a minister during the UPA-2 regime.
Rao, a versatile personality who directed about 150 films and worked for hundreds of others as a dialogue writer, lyricist and actor, was admitted to the hospital a couple of months ago, but was discharged.
He began his career as a theatre artiste and went on to work in films. Rao directed his first film in the early 1970s.
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