In general, this is just intent. I am not sure how the government plans to implement this. Government in India is huge and complex and most of the arms run independently, which is great for IT services vendors like IBM, TCS and others since they make money by selling the same stuff over and over again.
People who I know and are working in various organizations with the government are pretty frustrated with the pace and lack of intent on the ground.
Most Indian FOSS projects like BOSS Linux are pretty lame and they don't have any real community behind them. I think they took down the forum on the BOSS linux website, because there were no questions asked. Some of the other "successful" services like Spoken Tutorials (http://spoken-tutorial.org/) are pretty bad too (though I see websites have improved).
As a tax paying Indian citizen, I really hope all this changes.