This paper proposes a smart control scheme for operation of permanent magnet synchronous motor (PMSM) fed directly by three phase AC grid. Moreover, the control scheme eliminates the need of voltage source converter (VSC) at the grid end and facilitates to feed the PMSM directly through grid. The field oriented control (FOC) is employed for starting and speed control purpose. The control scheme bypasses the FOC and operates the PMSM completely on the grid when application demands constant speed and torque operation as int he case of pumping applications. The applicability of overall system constituting the utility grid in conjugation with FOC and proposed control strategy for PMSM coupled to water pumping system is simulated in MATLAB / Simulink environment.