In this work, we have developed a reduced order model relevant for fault diagnosis and control. This model is combined with a generalized likelihood ratio (GLR) method and integrated with fault tolerant control schemes developed earlier. Simulation studies of an ideal binary distillation column show that the use of reduced order model improves the diagnostic performance thereby leading to improved fault tolerance. Furthermore, the proposed strategy is also computational more efficient. In inferential control, such as the use of temperature measurements to infer product compositions, the proposed fault tolerant control scheme performs better than the conventional control scheme when various soft faults occur.