In the present scenario, rate of utilization of electrical energy is continuously increasing, to preserve the non-renewable energy resources, efficient consumption of electrical energy is one of the most important needs of this era. Smart Energy Meter (SEM) plays a vital role in efficient use of electrical energy in consumer premises. Accuracy in the measurement of current is one of the key factors to be considered while measuring energy consumption. This paper introduces Arduino based low cost single-phase SEM and proposes a linear regression based technique for accurate measurement of current. The proposed current measurement approach gives accurate measurement for linear as well as highly non-linear loads. The SEM built in the laboratory has data transfer capability and also embedded with Demand Response (DR) feature. Block Rate Tariff structure used by Tamil Nadu Generation and Distribution Company is considered to incorporate DR that warns the consumers whenever their energy consumption reaches the boundary of a block. © 2017 IEEE.