The home ministry considers such proposals according to the existing guidelines in consultations with agencies concerned, another official said.
The home ministry gives its consent to the change of name of any place after taking no-objections from the Ministry of Railways, Department of Posts and Survey of India.
These organisations have to confirm that there is no such town or village in their records with a name similar to the proposed one.
The renaming of a state requires amendment of the Constitution with a simple majority in Parliament. For changing the name of a village or town, an executive order is needed.
The proposal to change the name of West Bengal to 'Bangla', as suggested by the state government, was recently forwarded by the home ministry to the Ministry of External Affairs for its opinion as the proposed name sounded similar to the name of neighbouring country Bangladesh, the official said.
On Thursday, Gujarat Chief Minister Vijay Rupani said the state government was considering renaming Ahmedabad as Karnavati and the name change could be effected before next year's Lok Sabha elections.
BJP leader Raja Singh said on Thursday that the party would "aim" to rename Hyderabad and other cities in the state after the names of great people if it is elected to power in Telangana after the forthcoming assembly polls.
Last year, the Centre had approved the proposal to rename the iconic Mughalsarai railway station to Deen Dayal Upadhyaya (DDU) station after the Jan Sangh leader who was found dead in the railway station in 1968.
Approval was also given to add the word "Maharaj" in Mumbai's iconic Chhatrapati Shivaji Terminus. It is now known as Chhatrapati Shivaji Maharaj Terminus.
The name of any state was changed last time in 2011, when Orissa became Odisha. Names of Bombay was changed to Mumbai in 1995, Madras to Chennai in 1996, Calcutta to Kolkata in 2001.
The central government had approved the renaming of 11 cities of Karnataka, that included Bangalore as Bengaluru, in 2014.