Availability Based Tariff (ABT) has been implemented in all the regional grids of India for improving grid discipline by frequency dependent pricing. Currently it is limited to short-term energy transactions between the beneficiary States and Central generating stations without the need for negotiations on price or quantum in real time. In the present scenario, Independent Power Producers (IPP), Captive Power Plants (CPP), small Distributed Generation (DG) like mini-turbine, fuel cell, etc., are not considered under ABT. DG units are normally modular in size and they can be placed close to consumers so as to reduce the T&D costs and losses. Hence, they need to be encouraged so as to meet the ever-increasing electricity demands of Indian power sector within the financial constraints. In this paper, impact of IPPs, CPPs and DGs on intra-State ABT is studied. This paper also proposes to study the impact of grid connected DG on network availability and reliability. The improvement in system reliability is studied after evaluating reliability indices like SAIFI, SAIDI, etc., with the inclusion of DG.