Another thing is legal paperwork - some places in India are digitally signing marriage and birth certificates and they can be E-verified via government site. Being able to use blockchain to facilitate that would allow different government orgs to more quickly validate papers. Maybe that’s more blockchain that currency but both of those things could have positive effects for society.
UPI already does that and NCPI is a consortium. You don't need any 3rd party to send Re.1 and can use the standard BHIM app for this.
As far as cryptocurrency is concerned for micro transaction - Why?!
There was a recent discussion on how cryptocurrency is one of THE most wasteful (energy wise) form of financial transaction; with India's potentially billions (trillions?) of micro transaction the energy consumptions & carbon footprint would be unthinkable.