An activist in India's eastern Jharkhand state has ended a 16-day hunger strike after the government agreed to protesters' demands to cancel a controversial recruitment exam.

However, the protesters say they will not call off demonstrations until India's premier investigative agency begins probing alleged malpractices in other recruitment exams.

Devendra Nath Mahto ended his fast in the presence of state ministers at a hospital in capital Ranchi, where he was admitted last week after his health deteriorated.

He was one of the faces of the protests, which began on 25 July after job-seekers and students alleged irregularities in government recruitment exams and demanded reforms.

Government jobs are highly sought after in India as they offer stability and security. Millions of people write these exams every year across states and nationally, often attending coaching classes, until they reach the mandated age limit.

But several exams have landed in controversies due to allegations of question papers being leaked and candidates using unfair means. Even for many who qualify, the uncertainty doesn't end as the recruitment process can drag on for years.

In Jharkhand, the protests began after last month's preliminary civil service exam results, with some candidates alleging that answer sheets shared online showed successful applicants had answered fewer questions than expected, fuelling suspicions of manipulation.

It came on the heels of a larger protest in Indian capital Delhi, which culminated in the resignation of the federal education minister, and hence put more pressure on Chief Minister Hemant Soren's government.

The state government agreed to cancel the preliminary exam days ago and announced an investigation by the state's Criminal Investigation Department (CID), which has arrested several people including the chief of the Jharkhand Public Service Commission.

But protesters had held out for the cancellation of the Jharkhand Staff Selection Commission-Combined Graduate Level (JSSC-CGL) examination and also demanded an investigation by the Central Bureau of Investigation (CBI).

On Monday night, Soren announced that this exam would also be scrapped.

The chief minister told reporters that "many shocking facts are emerging" as part of the CID's investigation into the exam irregularities but did not give more details, saying that "the matter is under investigation".

He also announced that all exams conducted by private agency TSR Data Processing Private Limited (TDPL), which had won a tender, would be cancelled. He also announced an investigation into recruitment exams held since 2014 – it's not clear yet what would happen to candidates who cleared those exams if the investigation does find any irregularities.

A committee will also be set up to recommend reforms to the state's examination system.

The announcement sparked celebrations among protesters, who danced and cheered at a stadium in Ranchi, where they have been camping since 25 July.

But some said they would continue their protest until the CBI investigation was announced.

"Until that demand is met, we will not move from here," student activist Ravindra Paswan told news agency ANI.

The protests had put the government – an alliance which includes Soren's Jharkhand Mukti Morcha, the Congress and some other parties – on the backfoot. Prime Minister Narendra Modi's Bharatiya Janata Party (BJP), which is in the opposition in the state, has been supporting the protesters.

Reports say the government's decision to cancel the JSSC-CGL exam has triggered backlash from successful candidates who had already joined government jobs.