For the first time, the stage seems set for a triangular contest when Delhi's 11.5 million voters excercise their franchise for a new 70-member assembly exactly a month from now.
The Congress had won 43 seats in 2008 against 24 of the Bharatiya Janata Party (BJP).
The rise of the 11-month-old AAP is attributed to its outreach to slum dwellers and the middle class, groaning under the weight of rising prices and miffed at corruption and rising incidents of crimes against women in the national capital under the rule of a woman chief minister, Sheila Dikshit.
But lack of political experience could, however, puncture the AAP's claims of getting a clear majority.
According to political experts, although the AAP is certainly expected to make a dent in the polls, there is a question mark over how far it will be be able to go.
"The AAP will be kingmaker in Delhi as the middle class wants change and the party has been able to attract their attention," senior journalist Kuldip Nayar told IANS.
Agreed Sanjay Kumar of the CSDS: "The AAP will be a key player."
And what could worsen matters for the BJP, the faction-ridden opposition party, is the fact that it lacks a clear vision and has failed to capitalise on the public anger against the ruling party's failures.
The BJP has so far been unable to project itself as a united force with differences over who would be its chief ministerial candidate spilling over in public.
The party has finally named Harsh Vardhan for the top job in Delhi, but what would be the extent of damage from the camp of his rival Vijay Goel, who has been made to rein in his ambitions, remains to be seen.
According to Sanjay Kumar, the BJP has a golden opportunity to come back to power, but infighting over the chief ministerial candidate could mar its chances.
"People are disenchanted with the Congress," he told IANS.
AAP attributed its outreach to slum dwellers and the middle class
Voicing a slightly different view, political analyst Parasnath Chaudhary, a retired professor from South Asia Institute at Heidelberg University, said the AAP's entry in the political field will confuse voters.
"The voters in Delhi will certainly be confused this time because earlier there was either the BJP or the Congress, but now the AAP has emerged as an option as well," said Chaudhary.
He said the AAP lacked "political appeal" and it won't be able to do "much harm" to the two bigger parties.
"People are not happy with the Congress in Delhi and may vote for the BJP," Chaudhary told IANS.
And to no one's surprise both the BJP and the Congress dismissed the AAP's claims.
"We don't consider the AAP as a challenge since it is a party with nuisance value. They have just entered the political arena and it will take time for them to make an impact," senior Congress leader and minister Haroon Yusuf said.
The BJP's new poster boy, Harsh Vardhan, also voiced similar feelings.
"The battle (in Delhi) is between the Congress and the BJP only. They (AAP) don't stand a chance... The BJP will get two-thirds majority in Delhi," Harsh Vardhan told IANS.
Parties aside, development issues will also dominate the Delhi poll scene.
The Sheila Dikshit-led Congress is seeking a fourth consecutive term on the basis of achievements like the Delhi Metro, flyovers and regularisation of unauthorised colonies, which have been voting for the Congress.
The BJP and the AAP are raking up issues like high power and water tariff, rampant corruption in civic agencies, lack of safety for women and alleged irregularities in the Commonwealth Games 2010.
And if voted to power, the BJP has promised to reduce electricity charges by 30 percent and provide affordable housing to the poor.