Prime Minister Narendra Modi chaired the Cabinet Committee on Economic Affairs and approved the Department of Water Resources, River Development, and Ganga Rejuvenation's proposal from the Ministry of Jal Shakti. The proposal aimed to finish the remaining tasks of the North Koel Reservoir Project at a revised cost of Rs 24.30 billion (central share: Rs 18.36 billion), in contrast to the initial approved balance cost of Rs 16.22 billion (central share: Rs 13.78 billion) in August 2017.

It was disclosed that upon completion of these pending works, the project would facilitate additional annual irrigation covering 42,301 hectare in the four drought-prone districts of Jharkhand and Bihar.

The North Koel Reservoir Project, a major inter-state irrigation initiative, encompasses areas in both Bihar and Jharkhand. The project includes a dam on the North Koel River near Kutku village (District Latehar, Jharkhand), a barrage located 96 km downstream of the dam (at Mohammadganj, District Palamu, Jharkhand), Right Main Canal (RMC), and Left Main Canal (LMC) originating from the barrage. Construction of the dam and associated activities commenced in 1972 under the Bihar government's initiative. The work persisted until 1993 when it was halted by the Forest Department, Govt. of Bihar, due to concerns that the accumulated water could pose a threat to the Betla National Park and Palamu Tiger Reserve. Consequently, the project, which initially provided annual irrigation to 71,720 hectares, came to a standstill.

Following the state's bifurcation in November 2000, the headworks, namely the Dam and Barrage, now fall within the jurisdiction of Jharkhand. Additionally, the entire 11.89 km Left Main Canal (LMC) originating from the Mohammadganj barrage is located in Jharkhand. However, out of the 110.44 km of Right Main Canal (RMC), the first 31.40 km lies in Jharkhand, with the remaining 79.04 km situated in Bihar. In 2016, the Government of India decided to provide assistance to complete the pending tasks of the North Koel Reservoir Project, aiming to operationalize the project and realize the intended benefits. To preserve the core area of the Palamu Tiger Reserve, it was decided to lower the reservoir level. The Union Cabinet approved the proposal to complete the outstanding works of the project at an estimated expenditure of Rs 16.22 billion in August 2017.