Nowadays power systems often operate close to their stability limit due to the rapid growth of new customers and inauguration of industrial sectors in the existing distribution networks. Even though the evolution of renewable energy sources (RESs) and Flexible Alternating Current Transmission (FACT) devices are the best solutions to meet these demands, they increase the complexity and dynamic behavior of the network. Due to this the standard energy management system (EMS) is un able to capture the power system dynamics, lack of time synchronization and it relies on only on the magnitude information. When a power system is operated close to its stability limit, it is difficult to control the reactive power demand which in turn dangerously affects the voltage stability of the system. Furthermore, unable to detect local voltage stability problems may responsible for several major voltage collapse incidents. Thus, all above clearly show that there should be advanced monitoring devices that are fast, accurate and have reliable synchronization methods better than Supervisory Control and Data Acquisition (SCADA). Within this context, Phasor Measurement Unit is one of the most promising devices which provides a synchronized estimation with high accuracy and low reporting latency. In this regard, the researcher wants to develop a synchrophasor estimation (SE) algorithm which is the main component to build up a PMU. In addition, to have the best monitoring tools, it is very important that voltage stability analysis is performed, and the voltage stability index (VSI) which is suitable for real-time analysis shall be used to predict the imminent danger of collapse early enough and to monitor the voltage stability proximity to collapse. Thus, again the researcher aims to asses an index that can be used for online applications, comparatively robust and applicable for a distribution system that takes other relevant parameters other than voltage magnitude. The simulation result shows that the i-IpDFT algorithm can estimate the amplitude, phase, and frequency within the maximum error of 0.0014, 0.00365 and 0.00129 respectively which are acceptable for further applications of the power system. This research work can solve various interrelated problems of electrical utilities which have no mechanisms of knowing the imminent danger of collapse by seriously follow the global index and the fundamental tone parameters. With synchrophasor technology, it is possible to aid power system operators’ situational awareness and help them forestall grid collapse through better recognition.