It is a good decision

Yes, it seems to me a good decision in that it removes uncertainty and puts India in line with developments elsewhere. The long debate probably goes back to decisions made years ago when the older British universities had to come to terms with the power and prestige of doctoral degrees internationally. Degrees such as the B.Litt. lost prestige because they could not be meaningfully be interpreted in relation to the doctoral degree path. Similarly, in the realm of academic titles the once prestigious title of 'Reader' gave way to Associate Professor. Such decisions have little to do with academic quality and much more to do with the international alignment and intelligibility of degree denominations.

A M. Phil degree is a good stop-gap degree when you are not really sure you want to get into research full-time in a Ph. D. program. It also serves as a good exit degree if one fails a Ph. D. qualifier or decides to opt out of a Ph. D. program. By itself, it does not serve too much of a purpose. Therefore, it is a good decision and somewhat simplifies the overall academic program struture although it takes away the option of testing research waters before deciding to do a Ph. D.