New trends in power system include the placement of the distributed generators (DGs) to overcome the drawbacks of the conventional power system, it can be connected near to the load points. Hence, the placement of DG is an important factor to be considered for the analysis due to its positive as well as negative impacts. An improved analytical approach for enhancing the reliability of the power system has been developed in this paper. By integrating DG of selected penetration level at all nodes of the test system, a set of reliability indices are evaluated based on interruption, improvement indices and blended as the multi-objective functions. Combinations of LVDI and PLRI with reliability improvement index are calculated by selecting the blended indices. Hence, enhanced system reliability is achieved. The analysis is carried out under the MATLAB platform on the standard RTBS bus distribution system.