Huge difference between Installed capacity and Generation of power in INDIA?

India is having total installed capacity of ~2,28,000 MW and Generation in 2013 was only ~1,23,000 MW according to http://articles.economictimes.indiatimes.com/2013-04-14/news/38529356_1_peak-power-deficit-power-shortage-central-electricity-authority

so why is this such HUGE DIFFERENCE?

Installed capacity just means you are planning the installation to have more potential generation even if you aren't using it. Lots of hydroelectric plants and coal plants will have the generators installed but not turn on the turbines to all their units because the power isn't needed at the present.

Generated power is the power actually used.

An analogy is like if you have an automobile like a corvette that has "installed capacity" of 450 hp, but if you were to see a dyno test of the horsepower you actually used during the year it might average out to 150 horsepower on average. So the horsepower is there if you want to use it...it just so happens not many people will use those 450 hp on an average trip

Installed capacity must cover peak load demand and also allow some of the capacity to be out for maintenance and/or repair. Generation represents power used averaged over the year (that includes low numbers in the night!!). Other factors between the two numbers are for example, wind power which only generates what the wind blows and hydro-power which may suffer from limited water supply.