Actually seems to me like a vague maneuver to redeem the poor image Indian Civil Aviation has been spreading 'round the world recently. Like "We can take appropriate action... when we want to".
I guess we will see a few bad surprises springing from those companies again anyway. It's not in one night you overcome bad habits.
I don't know if grounding the instructor would have been an appropriate action, since his fault appears to me to be about instruction, not actually flying a liner, but I reckon making a few examples might not hurt either.
Also hanging pirates never stopped piracy (not to be taken literally please).