For now, they are doing this in good intention. But they will not stop at that. Privacy is like a joke in India.
This is just the beginning and just an app. Further they do plan to track citizen movements directly from the mobile towers, the app will not be required - it requires them to legally acquire live data from mobile companies. And they have found an excuse to make such privacy intrusion laws. It is making of a police state. There are a few officers in the govt advising against this, but the bottom line is that the govt does not trust the country's citizens.
With Covid-19, the govt officials are publicly sharing the names and addresses of all positive people. The intention is good (to let others know whom to stay away from) and fortunately there is not much social stigma against infected people.