DVC, a legacy to the people of India, emerged as a culmination of attempts made over a whole century to control the wild and erratic Damodar river. The river spans over an area of 25,000 sq. kms covering the states of Bihar (now Jharkhand) & West Bengal.

The Damodar Valley has been ravaged frequently by floods of varying intensities and the first of the major recorded flood dates back to 1730. Thereafter serious floods occurred at regular intervals, but it was the flood of 1943 that left the worst devastation in its wake. As a result, the Governor of Bengal appointed a Board of Inquiry headed by the Maharaja of Burdwan and the noted physicist Dr. Meghnad Saha as member. In their report, the Board suggested creation of an authority similar to the Tennessee Valley Authority (TVA) of United States of America. The Government of India then appointed Mr. W.L. Voorduin, a senior engineer of the TVA to make recommendations for comprehensive development of the valley. Accordingly, in August, 1944, Mr. Voorduin submitted his "Preliminary Memorandum on the Unified Development of the Damodar River".

By April 1947, full agreement was practically reached between the three Governments of Central, Bengal and Bihar on the implementation of the scheme and in March 1948, the Damodar Valley Corporation Act (XIV of 1948) was passed by the Central Legislature, requiring the three governments – the Central Government and the State Governments of West Bengal and Bihar (now Jharkhand) to participate jointly for the purpose of building the Damodar Valley Corporation.

The Corporation came into existence on the 7th July, 1948 as the first multipurpose river valley project of independent India.

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