India has always been fighting a losing battle. You can't just ban things and take people's freedom. There are consequences for the government's actions. Many people believe the government always wins, while I do agree generally this is true... There are open shut cases that just cannot be proven without the government breaking its own laws which it wouldn't do so blatantly. (When they do break laws it is not the "government" perse but rather certain members within the government. Bad apples can make the whole batch look bad as they say.
This movement is just due to the possible backlash they will definitely get if they pass something as Nazi/communist/propaganda as being arrested for a truly nonviolent and harmless "crime". Just because the government doesn't like something doesn't mean they can simply make it a law and make it illegal, there are procedures for these things and they take due time. They do not happen over a few weeks. Not even a few months but usually years. laws take forever to be rewritten or clean slated entirely.
Cryptocurrency is a relatively new phenomenon, and many of the ministers within the Indian government doesn't have enough knowledge on the issue. So went by the recommendations of bureaucrats such as Subhash Chandra Garg, who wanted to make ownership of Bitcoin a criminal offense, which could result in imprisonment of up to 10 years in jail. However, lately the ministers seems to have realized that they can't go by the bureaucrat recommendation alone, as it would cause great harm for everyone.