The National Human Rights Commission also appeared to have taken a dim view of how the government charged her with obscenity but hadn't acted on her complaints.
Sri Reddy had last Saturday stripped in front of the Movie Artistes' Association building in the city to protest women from other parts of the country being given preference. She had later alleged that outsiders were more willing to trade sex for movie roles.
The association had responded by declaring that she would not be given the membership that would have helped her get roles.
"But it is nowhere mentioned, if action on the serious allegations of casting couch and sexual harassment, levelled by her, has been taken by the authorities," the commission said in a statement.
The human rights body said this made it look like the action taken against her was "an attempt to muzzle the voice of whistle blower", both by the movie association and the state government.
Besides, it observed that the reported ban on the actress from working in the film industry was "violation of her right to livelihood and live a life with dignity".
In its notice to the central and state government, the commission also underlined that the film industry should have a committee to probe sexual harassment at work places. "The issues raised by the actress demand action on part of the state government," the rights body said, calling for a committee to address and redress the grievances of female actors and employees in case of any sexual harassment at the work place, the Telugu Film Industry, in this case.