In this paper circulating current Reduction and power sharing deviation control is achieved in parallel connected inverters during off-grid operation. This problem exists due to the unsynchronized operation, mismatch of converter parameters, different line impedances etc. and this should be mitigated as the overall performance and efficiency of the system degrades. During the islanding operation of inverters, variation in load directly affects the load voltage as well as the system frequency, so a droop controller is used to maintain it for proper synchronization. Proper power sharing among inverters depends upon the output impedance and as the output impedance changes the characteristic of droop controller also changes. A new control strategy along with droop controller is proposed to achieve accurate as well as proportional reactive and active power sharing with a smooth load voltage and frequency profile. The technique is independent of variation in feeder impedances, external disturbances, component mismatches and gives the reduction in circulating current between the inverters which enhance the efficiency of the overall system. Simulations are performed on MATLAB/Simulink and output results show the feasibility of the overall system.