The Damodar Valley Corporation Act, 1948 was enacted on March 27, 1948 and was enforced in April 2, 1948. It was framed to constitute and control the Corporation for the advancement of the Damodar Valley which is located at the West Bengal as well as Bihar provinces. According to Section 103 as stated under the Government of India Act, 1935, many resolutions are effectuated under the guidance of the Provincial Legislatures Chamber to consider some of the matters under the present enactment that are described in the legislative list of the Province. The applicability of the Act becomes extended to the State of West Bengal as well as State of Bihar.

The Act provided for the constitution of the Corporation which is known to be the Damodar Valley Corporation. The Corporation shall have the position of the Company with continuous succession and will have the right to litigate and involve in court proceedings. The Corporation will be included with the Chairman as the Head and technical and finance member to assist him. There shall be a person to represent the Government of India and other two persons from the concerned State Governments from the State of West Bengal and State of Jharkhnad. Additionally, there shall be three experts from different subjects like irrigation, electricity as well as supply of water. A member Secretary shall also form the Corporation. The Chairman will be appointed by the Government of India after discussion with the State Governments. Other members will be appointed as prescribed under the enactment. The Chairman and some of the members shall work full time in the Corporation and other members are appointed on part time basis. The Chief Executive Officer to discharge the functions under the Corporation shall be the Chairman.

Moreover, the salaries and other terms of service shall be specified in the enactment. For the effectual performance of the duties and responsibilities, the Corporation is empowered to appoint other officials and employees. The salaries and terms of service of the employees under the Corporation shall be as decided by framing regulations. The tasks and their responsibilities shall also be decided under the enactment. Giving consideration to the rules framed by the Central Government, the Corporation under its discretion shall appoint Advisory Committees to reach the objectives of the Corporation and to perform functions by understanding the needs principally of the people residing nearby. The Corporation is entrusted with some powers and responsibilities under the enactment. The Central Government is directed to prescribe the area of the valley by publicizing in the Gazette of India. The Corporation shall perform the tasks and carry out the authority granted to it. The powers shall be exercised by the financial advisor in the area of operation specifically highlighted in the words of the Act.

The fundamental functions as given in the Act includes the advancement and functioning of strategies for supply of water, irrigation as well as drainage, fixing plans for the creation, conduction and allocation of hydra electrical energy and thermal electrical energy, formulating proposal for regulation of flood in the river Damodar and the near places and also for the development of free flow of water from the Hooghly river, regulation of boat service in the river, regulate soil erosion and encourage afforestation, maintenance of public heath etc. In addition to all these statements, the Act has included provision for irrigation and supply of water for irrigation as well as for household and industrial needs, supply and creation of electricity, restriction on the erection of dam without prior sanction of Central Government and many more. The Corporation is granted power to constitute, uphold and establish labs, practical and research centers, use water and electricity in limited form to improve the Valley, decide the effect of function of the flow of water in the river Hooghly and advance the facilities for navigation the Calcutta port. The Corporation is empowered to acquire property for public purpose, erect dams, buildings etc, control pollution, maintain health and sanitation, restrict fishing in controlled areas, take effective steps to control malaria etc.

The Central Government shall formulate rules on the subjects specified in the Act to effectively implement its provisions. The present Act was amended by enacting Damodar Valley Corporation (Amendment) Act, 2011.