Speculation is rife in both parties about the 77-year-old veteran politician's next move and how will it impact their prospects in the crucial Assembly elections, in the home state of Prime Minister Narendra Modi.
While the Congress is eyeing a return to power in Gujarat where it is in opposition for nearly two decades, the BJP is seeking to extend its good run in the state.
The BJP in Gujarat lacks a leader with mass connect, after Modi and BJP president Amit Shah left the state to helm the party's national leadership. The Congress, too, does not have any leader with mass appeal after Vaghela's exit, an observer said.
Both the Congress and the BJP are aware of the political heft of the Kshatriya strongman, who wields a considerable influence in North Gujarat.
Quitting Congress on his 77th birthday on Friday, Vaghela said, "Today, I free myself from Congress and I set Congress free," and indicated that he will chart an independent course.
Sources close to Vaghela say he will reveal his future plans shortly.
His son Mahendrasinh Vaghela, a Congress MLA, while hinting that Vaghela plans to contest the next elections, earlier told PTI that his father will not retire from active politics.
"We will all (supporters of Vaghela) sit together and chalk out the future strategy in a few days time," Mahendrasinh Vaghela said.
Political observers say Vaghela will pitch himself as an 'anti-Congress' and 'anti-BJP' alternative in the Gujarat elections as he feels that the situation is ripe for him to make the last attempt for the coveted CM's post, which he held for about a year in the 1990s.
The forthcoming state election is the last chance for the septuagenarian to give a shot at power and that's why he took the risk of quitting Congress after 20 years of association, they say.
Vaghela reportedly tried to convince the Congress to make him state party president and give him a free hand to fight the polls against the BJP. However, the Congress did not pay heed to his suggestion leaving him with no option but to quit the Sonia Gandhi-led party, the observers say.
The Congress and the BJP are "worried" over the next move of 'Bapu', as Vaghela's supporters fondly address him, though they may not accept it openly.
Sources in Congress say that Vaghela's next move is being closely watched by the party.
"Though Vaghela may deny that this (resignation) is for power, the people of Gujarat know that he has betrayed the Congress when it was looking to come back to power in the state after almost two decades," a source said.
"People will never accept him as the third force for quitting the party at a crucial juncture," he further said.
The sources in BJP say the saffron party is also calculating the impact of Vaghela's exit on the political scene in Gujarat and that it hopes he may not pose a formidable challenge to its quest to retain power.
The party will now have to re-work its strategy keeping in mind the 'Vaghela factor'.
"Vaghela had earlier formed a political party but has not been successful. He knows it is difficult for him to survive as a third front," the BJP source said.
For record, the Congress is downplaying Vaghela's exit and its impact on its electoral prospects.
Congress spokesperson Manish Doshi said, "The party will not face any adverse impact of Vaghela's exit. We will fight the elections on our own agenda and strength. Our aim is to oust the BJP from Gujarat."
BJP spokesperson Bharat Pandya said, "Now, when Vaghela has made himself 'Congress-mukt' (free), the BJP expects he will support the development agenda of the party."
"The Congress has received a severe jolt due to Vaghela's exit. It will be badly defeated in the elections," he said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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