It's been declared the worst blackout in modern history. Some blame it on certain districts overdrawing. Farmers have subsidized electricity basically meaning its free, and use electricity to draw water from their wells. Due to drought they may have overdrawn resources.
The greater problem is the need for economic reform. 2/3's of India's power is provided by Coal. Domestic coal production came at 2.6% annual growth between 2001 and 2011 while domestic demand for electricity grew 8% during the same period.
Makes sense that one of the few things China and India cooperate best on is the development of alternative power production.