Sridhara Swami's Commentary
The sublime, transcendental Supreme Lord although the energiser and controller of all living beings in creation does not partake of the merits of piety or the demerits of sins from any living entity. The reason being He is all pervasive, omniscient, eternal and thus He is always completely fulfilled directing the living entities precisely according to their previous actions by His external potency known as Maya the inscrutable illusory energy.
A question may be raised that it is seen that the Supreme Lord is merciful to His devotees and blesses them; but is unmerciful to non-devotees and chastises them which denotes partiality. So how does this exemplify that He is always completely fulfilled. Lord Krishna clarifies this doubt with the word jnanam meaning knowledge. Cognisance is the intrinsic nature of a human being and without it discrimination cannot manifest and the knowledge that the Supreme Lord is equal to all will be enveloped in ignorance. Thus one enveloped in ignorance is unable to discern that chastisement from the Supreme Lord for sinful activities is also His mercy and a blessing as well. Because of misconceptions beings become deluded from time immemorial and attribute partiality to the Supreme Lord.