Reliable operation of critical power system components like transformers is essential for uninterrupted power supply to the consumer end whereas consistent functionality of induction motors ensure the smooth and uninterrupted industrial operations. However, performances of the critical components decline due to various environmental factors. Therefore, continuous assessment of these components is required to ensure their satisfactory performance. Equivalent circuit parameters characterize the behavior and performance of electrical machines. Hence estimation of equivalent circuit parameters can provide significant information about the condition and performance of the machine. Machine modeling is very important for state of the art modern ac drive systems, for example vector control of induction motor. In vector control of induction motors, determination of rotor flux linkage estimation is essential, which requires accurate estimation of motor equivalent circuit parameters The equivalent circuit parameters of electrical machines can be determined from the standard test procedures, as per IEEE guidelines [22]. However, being offline, the technique cannot be employed for the machines which are in operation. Besides, deviation of environmental conditions (like temperature, humidity etc.) can lead to the change of the equivalent circuit parameters. Therefore, the present research work is oriented towards assessing the condition of those components on-line.