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India’s hottest startup is a political party

The new kid on India's political block, the Aam Aadmi or Common Man Party, has stunned the nation with its meteoric rise since its inception just over a year ago, but the question remains: does it have enough momentum to win big in the general elections?

Operating on a shoe-string budget, the anti-graft party, led by former tax official Arvind Kejriwal, has managed to capture the hearts and minds of disenchanted Indians looking to eliminate the rampant corruption that has plagued the country for decades.

(Read more: Why India's state elections matter)

"The Indian electorate has become increasingly dissatisfied with the performance of the ruling United Progressive Alliance [UPA] coalition government led by the Congress Party, reflecting a broad range of issues, including the extreme levels of corruption in India," Rajiv Biswas, Asia chief economist at IHS told CNBC.

"Unlike the Congress Party or Bharatiya Janata Party [BJP], the Aam Aadmi Party [AAP] is a new party founded in 2012 by its charismatic leader Arvind Kejriwal, with a strong focus on fighting corruption and improving the efficiency of Indian government," he added.

India, the world's largest democracy, was ranked 94 out of 177 countries in the 2013 Corruption Perceptions Index published by Transparency International.

Supporters of the Aam Aadmi (Common Man) PartyRaj K Raj | Hindustan Times | Getty Inages

The electorate's yearning for change is evident in the party's growing support base, which is expanding rapidly both domestically and abroad.

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For instance, V. Balakrishnan, who recently stepped down as a board member of I.T. services giant Infosys, announced last week that he has joined the AAP.

Meanwhile, thousands of non-resident Indians (NRIs) across the world are coming together to generate awareness and raise funds for the party.

In the eight months leading up to December's Delhi state election, the party raised around 200 million rupees ($3.2 million) globally via online donations, with over 65 million rupees coming from outside India, according to Saket Tandon of the AAP Singapore Forum.

Tandon, who dedicates his evenings and weekends to developing social media campaigns and fund raising initiatives for the party said, "The Aam Aadmi Party has given Indians across the globe a common interest, a common platform. We are all fed up with the political scenario. This gives us hope that things can change," he said.

Arvind Kejriwal and other leaders of the Aam Aadmi Party. The party's election symbol is the broom.Hindustan Times | Getty Images

State vs general elections

The party made a speculator debut in the recent Delhi state elections, winning 28 out of the 70 seats – dwarfing the ruling Congress party's 8 seats, and almost matching the opposition BJP's 31 seats.

In late December, Kejriwal formed a government with the support of the Congress which currently leads the national coalition. At age 45, he is the Delhi's youngest chief minister.

(Read more: Indian Prime Minister's mixed legacy)

However, the question remains whether the anti-corruption crusader can replicate his success outside of Delhi in the country's general elections due to be held by May 2014.

According to Jan Zalewski, South Asia analyst at global risk consultancy Control Risks, whether the AAP can be a real national alternative to Congress or BJP will likely depend on how the party is able to deliver on extremely high expectations and how it develops and diversifies its political vision.

"For now, the AAP is still in its infancy, with fledgling party structures and a still-weak political vision beyond its core anti-corruption focus," Zalewski said.

"It is thus likely to be able to tap into – and thus to a certain extent dilute – the two main parties' share of votes in many states where it decides to contest elections. In the short term, this could increase the fragmentation of Indian politics," he added.

—By CNBC's Ansuya Harjani. Follow her on Twitter @Ansuya_H


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