It is proposed that a capacitor can be connected permanently across each phase winding of a three-phase induction motor along with the conventional delta-star switching, for further saving in VARh at reduced loads on the motor. The method of choosing a suitable value for the capacitor and the criteria to be adopted for calculating the power output at which the star to delta switching is to be made are also explained. The experimental results on a 3-phase, 4-pole, 415 V, 50 Hz, 3.3 kW induction motor verify the advantages in adding the capacitor to the phase winding of the motor. Compared to using only a single delta connected stator winding or a delta-star switching, the advantages of the proposed addition of a capacitor, are also demonstrated through a case study conducted on a 400 V, 250 kW motor. Any further improvement in grid side power factor can be achieved by employing a static synchronous compensator (STATCOM) of reduced VAR rating.