They're more concerned about missing out on tax because they know perfectly well that even if they ban it, people will still do it in the black market. Indians are very good at finding ways around the system and subverting the government.

I don't think that it says anything about fully legalizing crypto, or accepting it parallel to the rupee in there. I searched that report and only came across one instance of crypto, which basically said it can be accepted as a form of virtual payment for the sports betting sector. 

It's focusing on the sports betting sector, which is easily taxed. Crypto will probably be accepted as a form of funding for the bets, but I bet they'll tax it heavily so no one will want to withdraw it through there.