Voltage stability of a power system is the ability of the same to maintain a steady voltage at all the system buses even after the system is subjected to some disturbance. This steady voltage is compared from some initial system state when there was no disturbance in the system. By far shunt capacitors were found to be the simplest and most economical method for correcting the distribution system voltage. But they do suffer from certain limitations which are inherent, as far as voltage stability is concerned. The paper studies the voltage stability of a distribution system and proposes placement of DG units with sufficient capacity and at suitable sites so as to improve the voltage stability of the distribution system. © 2019, Springer Nature Singapore Pte Ltd.