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Smart grid is designed to make the existing power grid system function spontaneously and independently without human intervention. Sensors are deployed to detect faults in the flow of power. In the proposed work, smart monitoring and controls are done by intelligent electronic devices. IED's (Intelligent electronic devices) monitors and records the value of power generated, and its corresponding voltage and frequency, which in turn is fed in to the demand-supply chain. Network architecture is designed to determine the flow of power from the generation end to the consumers. Demand-supply curve is embedded in architecture to map the power generated with the supply. If the demand at a particular instant of time is higher than the supply, then tariff is fixed and warning is given to the users regarding the rate of payment, to meet the higher tariff. Trust based authencity is provided for security.