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This study investigates the effect of voltage profile and steady-state voltage stability margin when a wind-driven squirrel cage induction generator (SCIG)-based distributed generator (DG) is integrated with radial distribution system (RDS). The study has been carried out considering different configurations of SCIG. The node at which a DG has to be installed is identified based on voltage collapse index (VCI), which is a measure of steady-state voltage stability margin. The computational procedure for studying the voltage profile of RDS without and with DG has been developed. The developed algorithm has been tested on the 33-bus RDS with 1 MW SCIG integrated at the identified node and results are furnished. Finally, a configuration of SCIG having star and delta switching arrangements with permanently connected capacitor across each phase winding of the stator is found to be superior in providing improved system performance over a wide range of wind velocity. A switching criterion for this type of DG is proposed based on VCI for the improved performance of RDS.