Goud became a member of Rao's cabinet with responsibility for three independent portfolios: Backward Classes welfare, Co-operation, and Total Prohibition.

[3] Subsequently, he became minister for Home, Jails, Fire services, NCC, Sainik Welfare, Film Development Corporation and Cinematography in Naidu's cabinet.

In 2004 he won a record-third term from the Medchal constituency, despite a statewide wave of anti-incumbency against the TDP government, as well as in favour of a separate Telangana state.

Goud believed that Telangana leaders should fight against these perceived injustices and organized a padayatra (procession on foot) from Pranahitha to Chevella in protest.

[6] This meeting was attended by 3000 delegates including Praja Gayakudu Gaddar, Konda Laxman Bapuji, Mallepalli Laxmaiah and Tirumali.

[7] On 9 July 2008 he organized a convention of Telangana students at Osmania University to explain his resignation from the TDP and his plans to lead non-violent agitation for statehood.

While the official reason for the merger is said to be common ideology of the two parties—social justice and separate Telangana, the reality is that Goud has been finding it difficult to run the party as it had failed to create the kind of impact he expected before he quit TDP on 23 June 2008 therefore watching out for his political future the decision was made about the merger.