Here are the latest developments:
All three major parties - the BJP, the Congress, and Arvind Kejriwal's Aam Aadmi Party - have said they currently are not in a position to form the government.
That opinion was shared yesterday with Mr Jung, who acts as the Centre's representative in Delhi. The Lieutenant Governor recommended that the current Delhi Assembly be dissolved.
Rules state that elections must be held within six months of the assembly being dissolved. Sources in the Election Commission say for logistical reasons, they would like the polls to be held in February.
The last election in Delhi, held in December last year, saw the BJP winning the maximum seats, but not a majority. Arvind Kejriwal then formed a government propped by the Congress, but he quit office after a 49-day term in February this year.
President's Rule was then imposed in Delhi, a decision challenged by Mr Kejriwal in the Supreme Court.
The top court recently attacked the Centre and the Lieutenant Governor for taking too long to decide whether elections should be called. The next hearing is scheduled for November 11.
Sources in the BJP say that Prime Minister Narendra Modi and BJP chief Amit Shah prefer for their party to go through new elections, rather than trying to stitch together enough support to win a trust vote in the state legislature.
Leaders of the BJP's Delhi unit and its seven MPs from the national capital will meet this evening to begin strategising for the elections. State unit chief Satish Upadhyay and party in-charge for Delhi, Prabhat Jha, will be part of the meet.
Given the BJP's big victories in last month's election in Haryana and Maharashtra, the BJP hopes to get a decisive verdict in its favour in Delhi as well.
The Congress has dared the Centre to hold elections in Delhi by December, along with the Jammu and Kashmir and Jharkhand polls. The Aam Aadmi Party too has sought elections at the earliest.
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