43-year-old Parkash, who had switched over to AAP from the BJP before the Lok Sabha polls, has also resigned as MLA, bringing down the ruling party's strenth to 65 in the 70- member Delhi Assembly.
His resignation comes at a time when AAP is making an all out effort to win the April 23 municipal polls after the party's disappointing performance in the recent Punjab and Goa assembly polls.
He was flanked by senior BJP leaders including the party's Delhi in-charge Shyam Jaju, city unit chief of the party Manoj Tiwari, Leader of Opposition in the Delhi Assemmbly Vijender Gupta among others.
In a sharp reaction, the AAP accused the BJP of trying to destabilise the city government and said the saffron party is rattled by the prospect of a "severe defeat" in the civic polls after Chief Minister Arvind Kejriwal's decision to do away with residential house tax.
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In a letter to Kejriwal, Parkash said he was pained to see that though the party had come to power promising to end corruption, no concrete measures have been taken in the last two years to contain graft.
Parkash said the AAP government is totally "disconnected from ground realities" and is "being run through laptop".
Welcoming Parkash into the BJP, Tiwari said not only the people of Delhi are suffering due to the "failures" of Kejriwal government, there is desperation among AAP MLAs as well.
Sources in the Election Commission said once the vacancy is notified by the Delhi Assembly, a call on holding the bypoll for the seat vacated by Parkash will be taken.
Parkash's resignation has brought down the AAP's tally to 65 from 67 in the 70-member Delhi Legislative Assembly. Earlier Rajouri Garden MLA Jarnail Singh had quit to contest Punjab assembly elections against Akali Dal leader Parkash Singh Badal.
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