Ever increasing demand of electrical energy world over and environmental concerns are driving the existing fossil fueled based energy system to efficiency, conservation and utilization of more and more renewable sources of energy. The electricity consumers are becoming more proactive and are participating in energy consumption decisions which affect their lives. All these concerns necessitate that the century old energy grid should be modernized and made smart with the applications of smart devices, information technology, modern communication devices and fast computational techniques. A smart grid should employ smart control centres, smart transmission and distribution networks, creation of mini and micro grids, use of distributed generation etc. This work is an effort to investigate all the developments related to smart grid in reference to India. The development for creating smart grid in India are multidimensional in nature but the major focus is to electrify areas which have not been covered so far, to reduce losses, to strengthen the existing grid and to make greater use of renewable sources of energy.