This paper proposes coordinated active and reactive power control strategy of wind-biogas based hybrid system for rural electrification (HSRE) in order to provide continuous and reliable source of electricity to a cluster of villages. In the control strategy used for HSRE, a predefined part of load is being supplied by the grid and the remaining part, under steady state as well as small signal disturbances, is taken care by a hybrid system of controllable and intermittent sources of energy. Induction generator (IG) based wind energy conversion system (WECS) has been considered as a source for HSRE. Since reactive power is needed by both IG and load, an additional source of reactive power, static synchronous compensator (STATCOM) is used to fulfill the reactive power requirement. The synchronous generator has been used for power generation from biogas-genset which is fitted with electronic speed governor and automatic voltage regulator (AVR). The concept of defined grid operation is achieved by considering dynamics of system voltage angle as well which cannot be achieved by the usual control techniques for frequency and voltage magnitude. The developed hybrid system is given a small signal disturbance in load as well as input wind power. The robustness of proposed control strategy has been showed from the dynamic performance results by maintaining power balance between system components while regulating the system voltage and frequency.