The plan for harnessing the river for irrigation and power generation in the Narmada basin was initiated in 1946. Seven projects including the Bharuch project were identified during the initial Survey and 4 projects Bharuch (Gujarat), Bargi, Tawa and Punasa in Madhya Pradesh were given top priority for investigation. After the completion of investigation, the proposed dam at Gora in Gujarat with the full reservoir level (FRL) 161 ft (49.08m) was selected and the foundation stone was laid by late Prime Minister, Pandit Jawaharlal Nehru on 5th April, 1961. However as more detailed, modernised contour sheets from the Survey of India were available thereafter, possibility of raising the height of the dam for optimum utilisation of water was considered.
In 1964, to resolve the dispute about sharing of the Narmada Waters between the Governments of Gujarat and Madhya Pradesh, the Government of India appointed an expert committee under the Chairmanship of late Dr. Khosla which recommended a higher dam with FRL 500 ft (152.44m) in 1965. However, Govt. of M.P. was not agreeable to development of Narmada water as per Khosla Committee report and hence the Narmada Water Dispute Tribunal (NWDT) was constituted by the Government of India in October 1969, under the Inter State River Water Disputes Act, 1956. NWDT gave its final award in December 1979.