According to police, Vaghasia has been on the wanted list for the last four years after the Rs 50 lakh scam came to light following a complaint filed by Water Supply Board Executive Engineer K N Patel here.
Patel had alleged that the sum provided by the Centre as part of the rural drinking water supply scheme fund was misappropriated and not properly utilised by Vaghasia, who was then the sarpanch of Kotda Sanghani town here.
"Vaghasia was arrested last evening from his office in Gondal town about 39 kms from Rajkot," DySP N N Mehta said.
The MLA was produced before a magistrate at his residence last night from where he was sent to the district jail here, police said.
The State CID, which is investigating the matter, will take his custody by tomorrow.
Vaghasia, who is facing corruption charges in the scam had managed to escape arrest so far despite being seen at public functions several times.
