The worst blackout to hit India in more than a decade left 370 million people in seven northern states without power for more than eight hours on Monday.

The capital, Delhi, as well as the states of Punjab, Haryana, Uttar Pradesh, Himachal Pradesh, Rajasthan and Jammu and Kashmir were all affected.

Hundreds of overnight trains were stopped in their tracks after power to northern railway lines was cut, and Delhi's metro system was badly hit. Water supplies in the capital, always patchy, were worse than usual, as was road congestion after most traffic lights failed.

Around 11am local time, India's minister for power and energy, Sushil Kumar Shinde, claimed 60% of power had been restored to the northern grid.

He then prompted widespread incredulity by claiming that India had one of the best power grids in the world and boasting that when the US faced a similar failure in 2008, it took power from India.

This time, it was neighbouring Bhutan which came to India's rescue, as Delhi's metro drew on hydroelectric power from the country. Services on all six metro lines resumed by 8.45am after almost three hours of disruption.

Shinde said the power cut was caused by some states taking more than their fair share of electricity. "The reason for the outage was due to some states taking more power than they ought to have, which causes the frequency rate of the grid to go up. The offending states will be severely penalised," he told a press conference in Delhi.

A three-member committee would be formed to investigate what had caused the entire northern grid to fail, he added.

India is the world's fifth-largest electricity producer after the US, China, Japan and Russia, but its per capita consumption is among the world's lowest. In 2009, Indians used 571 kWh per capita, compared with the US, which consumed 12,914 kWh per head.

Indian politicians are forever coming up with new electricity-saving wheezes. The state of Punjab has just banned air conditioning units in all government offices and from 1 August will cut office hours to 8am to 2pm with no lunch.

There was outrage in June when the chief minister of Uttar Pradesh, India's most populous state, decreed that all malls were to shut at 7pm in a bid to save power.

India's power supply is so insecure that even a stray pet can plunge millions into darkness. On Saturday, a cat leapt into a Delhi grid station and was electrocuted, causing a fire that left parts of east Delhi without power for 24 hours.