This paper presents a reference current generation scheme for improved dynamic performance of a doubly fed induction generator (DFIG) subjected to unbalanced grid voltage. The power and torque oscillations induced due to the unbalance in grid voltage are minimized using additional compensatory terms in the reference currents. The focus is on estimating the reference currents and control implementation without the need for dual vector control. Real and reactive power control is implemented in the positive d-q reference frame using stator flux-oriented vector control. The rotor-side converter (RSC) is controlled to enable effective reduction of oscillations in torque and active and reactive power. The dc-link voltage oscillation is minimized and the grid-side power factor is maintained unity using the grid-side converter (GSC). Unlike the previously reported techniques, the proposed scheme enables effective reduction of oscillations in torque, active, and reactive power, and the dc-link voltage, all in a single target. The performance of DFIG is investigated in consideration with the Indian Electricity Grid Code (IEGC). Numerical simulations are carried out in power system computer aided design/electromagnetic transients including direct current (PSCAD/EMTDC) for the laboratory 3-hp DFIG test setup. The results establish that the performance of DFIG is notably enhanced with the proposed scheme