If the government really concern with their people, they can accept cryptocurrency and allow them to search for a new source income. I am sure that people in India will thank you to the government because they can try to get the money from the new source and the best is they can get a better life with that money. If people can get a better life, that will reduce poverty in that country, and the economy in that country will be growth.
I don't really see how that is going to help or destroy them though, if it's only going to serve as a means of making payments. There is PayPal there already and it is serving for the same purpose there and if they should get a job online they can be accepting payments through PayPal. The only thing I suggest they do with cryptocurrency is just to invest and trade and that's it. Apart from that I don't really see any other thing. I mainly blame the government when a country is bad on crypto regulations.
I have seen a few people in this forum come up with points like these about countries that are economically poor using crypto to grow their level. I have seen Venezuela mentioned a lot of times and people saying they should resort to making use of cryptocurrency to get better.