? That's kinda odd India has recognized the, transgender aka hijra, population for centuries. But I was told by a cab driver last time I was in India that many work as prostitutes If anything I would guess it is not a government directive but the workings of a corrupt police unit, trying to extort money.
It maybe a corrupt act but to be honest they are a nuisance a lot of time with extortion like attitude to get money from people. I have had a personal experience it was not even decent and left me feeling no sympathy for that person. They board trains illegally and pester people until they get some money which is not acceptable.