Global observers are monitoring the power situation in India and its impact on the Asian giant's economic growth. Three regional power grids collapsed on Tuesday afternoon, causing half of the country to be in the dark for several hours.

The massive blackouts affected 620 million Indians, stalling trains, causing traffic chaos and shuttering factories and offices.

By Tuesday evening, power had been restored in most regions, the New York Times reported, and many people in major cities barely noticed the disruption, because localized blackouts are so common that many businesses, hospitals, offices and middle-class homes are equipped with backup diesel fuel generators.

Smaller power failures had hit India on Monday, raising concerns over the aging state of infrastructure in India and the ability of the government to address the huge energy requirements of a nation considered a rising global economic power.

Power Minister Sushil Kumar Shinde said the blackouts were caused by states using energy beyond their allotted share.

"Everyone withdraws from the grid. Just this morning I held a meeting with power officials from the states and I gave directions that states that overdraw would be punished. We have given instructions that their power supply would be cut," he said, according to the Sydney Morning Herald.

The impact of India's power crisis was felt in 20 of India's 28 states. Darkness was experienced from the South Asian country's boundary with Myanmar in the northeast all the way to its border with Pakistan which is about 3,000 kilometres (2,000 miles).

Since smaller power failures has become a way of life in India, many businesses and key institutions such as hospitals and airports just ignited their backup generators to ensure continuous operations.

Surjit Singh Bhalla, chairman of Oxus Fund Management, said Indians are watching how Indian Prime Manmohan Singh will address the nation's power crisis.

"This looks even worse than it would normally because there's an impression that India's economy is falling apart right now.... In any normal time, people may say that accidents happen. Right now everyone is looking at Singh to see what, if anything, he is going to do to fix the problem," Bloomberg quoted Bhalla saying.

Ironically, Singh promoted the power minister to home minister on the same day that massive blackouts disrupted the Indian economy.

"This is a huge failure," said Prakash Javadekar, a spokesman for the opposition Bharatiya Janata Party. "It is a management failure as well as a failure of policy. It is policy paralysis in the power sector."

Sushil Kumar Shinde, the power minister, who spoke to reporters in the afternoon, did not specify what caused the breakdown but blamed several northern states for consuming too much power from the national system.

"I have asked my officers to penalize those states which are drawing more power than their quota," said Shinde, whose promotion was announced a few hours later.

Surendra Rao, formerly India's top electricity regulator, said the national grid had a sophisticated system of circuit breakers that should have prevented such a blackout. But he attributed this week's problems to the bureaucrats who control the system, saying that civil servants are beholden to elected state leaders who demand that more power be diverted to their regions - even when it threatens the stability of the national grid.

"The dispatchers at both the state and the regional level should have cut off the customers who were overdrawing, and they didn't," Rao said. "That has to be investigated."

For resources-exporting nations such as Australia and countries in the Middle East, India's woes present an opportunity to sell more of their energy sources such as coal and natural gas to New Delhi as stop-gap measures.