Many economists are suggesting to give cash handouts directly to people till the pandemic is over so that they can buy food and basic necessities with that money.
In general, with limited investment, developing countries give priority to the welfare of the citizens over providing world-class facilities for them. So, it's better to transfer that responsibility to private players to create a win-win situation for all.
This ban will act as a caution for all the tech companies to follow the rules and to store the data locally. And this is also a great opportunity for the Indian companies to launch and upgrade their apps as alternatives to the banned apps.
Just like past pandemics, Covid too is coming in waves. At the time when countries are recovering from the first wave, several countries are facing a second wave of Covid and thereby weakening their economic recovery.
At present India is facing an economic slowdown. In the April-June quarter, India's GDP growth rate was just 5.7%. To become a $5 trillion economy, at least 8% GDP growth rate is needed.