Not only can it have 24x7 camera access, it can read your texts and call logs.
And with it coming pre-installed on android phones, it may even have root permissions which means that it can do anything on the device.
Note the ability to read and modify storage. This is entirely so the government can plant anything on your phone and arrest you later. Perfect solution to curb any political dissent since most courts in India are controlled by the RSS now and you won't even get a trial for years.
They have made it "deletable" officially but if it has root access then it won't go away. It still comes pre-installed and the tech illiterate population won't do shit against this.
It's Spyware.
The app basically replicates the capability of Apple Find My. It also lets users check if they have any other phone numbers attached to their identity. Nothing major.
It doesn't need background Camera permissions, the ability to read your texts and the ability to read/write on your file system. The latter is very problematic because dissent is basically illegal in India right now.