The distribution static compensator (D-STATCOM) is a power quality compensator, which can be utilized for improving the power quality of the distribution power grid by managing the flow of reactive power and unbalanced caused by variable and unbalanced loads. This paper develops the concept of regulating the D-STATCOM scheme to improve the dynamic proficiency of the power distribution network during electrical network defects, such as voltage drops and voltage swells. Furthermore, the methodology adopted in this research paper is established to utilize the sliding mode control (SMC) for the proper working of D-STATCOM. The simulation of the suggested SMC methodology has been carried out by employing the MATALB/Simulink software and compared the results with traditional proportional integrator regulator. The results show that the suggested approach controlling the D-STATCOM achieves sinusoidal and symmetrical grid current with less harmonics; moreover, it can efficiently eliminate the oscillations produced in active and reactive power. Hence, the proposed strategy is helpful in mitigating the voltage flicker and improving the overall efficiency of the distribution grid.