The RJD and JD-U on Wednesday announced they will contest 100 seats each in the Bihar assembly election, leaving 40 seats to the Congress and three to the NCP.
Friends-turned-foes-turned-allies Chief Minister Nitish Kumar and Rashtriya Janata Dal (RJD) chief Lalu Prasad proved sceptics wrong by declaring that they had reached a consensus over seat sharing for the 243-seat assembly.
"We are united. There are no differences amongst us. We will defeat the NDA," Lalu Prasad, referring to the National Democratic Alliance led by the Bharatiya Janata Party (BJP).
He said a 'Swabhiman Rally' of the grand alliance would be held on August 30 in Gandhi Maidan here.
Lalu Prasad accused Prime Minister Narendra Modi of insulting Biharis with his DNA remark on Janata Dal-United (JD-U) leader and Chief Minister Nitish Kumar.
"We will reply to Modi's remark about the DNA of Nitish Kumar at our joint rally," he said. "Modi has insulted Bihar, and Biharis will take revenge."
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Added Nitish Kumar: "We will jointly campaign across the state."
Most political watchers had feared that the two main parties ranged against the BJP in Bihar would run into problems over seat sharing, with each insisting on a higher share.
But Lalu Prasad and Nitish Kumar surprised everyone by announcing that they had overcome the major hurdle.
This is the first time Nitish Kumar and Lalu Prasad will be jointly fighting an assembly election since they parted ways while being part of the Janata Parivar in the 1990s.
After turning bitter rivals, Nitish Kumar joined hands with the BJP while Lalu Prasad became part of the Congress-led UPA alliance.
The two embraced once again after Nitish Kumar dumped the BJP following the rise and rise of Narendra Modi in the party.
Lalu Prasad hinted on Wednesday that should there be problems on any issue, Nitish Kumar and he would resolve them. "Both of us will meet and discuss any issue that need to be tackled."
Wednesday's announcement is expected to put pressure on the BJP-led NDA, which, after its sweep in the Lok Sabha polls, is determined to come to power in Bihar.
Some BJP leaders want to give no more than 70-80 assembly seats to its allies -- the Lok Janshakti Party of union minister Ram Vilas Paswan, the RLSP of union minister Upender Kushwaha and the HAM of former chief minister Jitan Ram Manjhi.
But the LJP has alone staked claim to over 80 seats. The RLSP wants to contest more than 60 seats while the HAM is eyeing 50 seats.
Lalu Prasad insisted that the RJD, the JD-U, the Congress and the Nationalist Congress Party (NCP) were confident of defeating the BJP and its allies.
In the outgoing assembly, the JD-U has more than 110 members and the RJD 24 seats. The BJP has around 85 legislators in Bihar.