This article proposes a novel cost-effective phase current sensing scheme for switched reluctance motor (SRM) drives. An online error correction strategy is involved in the proposed phase current sensing scheme for detection accuracy enhancement. First, the operation principles of conventional phase current sensing schemes are illustrated for SRM systems. Besides, the types of current sensor errors and their impact on SRM operation performance are discussed in detail. Then, a cost-effective phase current sensing scheme is proposed with the idea of sensor multiplexing and multiple information measurement. Additionally, the operation principles and applicability analysis are carried out. Subsequently, an online error correction method that does not require additional components is presented for the current sensor offset and scaling errors. Moreover, the applicability and portability of the proposed method are explored. The proposed scheme improves the detection accuracy and lowers the system cost. Finally, the validity of the proposed phase current sensing scheme is verified through the experiment.