This paper will highlight a methodology for contingency analysis of transmission network. The contingency analysis is conducted by developing a new index namely power and voltage deviation (PVD) based index. It has been formulated by combining the two indices such as active power severity index (ASI) and Voltage severity index(VSI). The APS will represent the deviations of the active power flow through various transmission lines under different contingency scenarios. Further, the VSI will represent the variations of the voltage profile of the network considering different contingencies. The ranking of the different contingency scenarios are done according the value of the overall PVD index. The highest value of PVD will indicate the most critical contingency and so on. The developed contingency analysis scheme is experimentally validated through benchmark standard IEEE 5 bus and IEEE 14 bus systems. The experiment and simulation of contingency creation was conducted on MATLAB software and power flow algorithm was run for each possible contingency scenario and the experimental results are discussed. The developed contingency ranking and analysis scheme will be helpful to determine the critical contingency scenario. System planners can visualize the various network parameters through contingency analysis and anticipate the remedial actions accordingly. Hence, the proposed contingency analysis methodology will be useful for proper planning to avoid any tripping or network outages under contingency conditions. The contingency analysis will be also beneficial in terms of network reliability and asset management.