The amount of water totally depends on your desired consistency of the gravy. (flavorquotient.com)
So the quantity of water should be as much as your desired consistency of the gravy / sauce. (flavorquotient.com)
When the oil starts to separate from the spice, lower the heat to the bare minimum and gradually add the beaten yogurt stirring continuously, otherwise the yogurt will curdle and you won't get a smooth consistency of the gravy. (flavorquotient.com)