The mighty veteran Purulia Express serving for decades, daily commuters' lifeline and witness to a Rising Bengal! - Soumyadip Mahato

It is not about which locomotive is best. IR's 3-phase diesel-electric locos (EMDs and the GE WDG4G/6G) and the 3-phase elocos (WAP5/WAG9) are equally efficient. Neither of them is superior to the other. They are made for different purposes.
Countries like the USA and Australia are almost exclusively diesel hauled. They are very efficient and convey a lot more freight traffic than India.
An electric loco can easily be made more powerful, but is useless without OHE. A diesel-electric loco can go anywhere on the tracks, without requiring additional infrastructure.
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reason for going for electrification is the cost and traffic. When a route has very few trains, it doesn't make sense to spend crores of rupees on electrifying the track. But, when a route has a lot of traffic, it is cheaper to electrify it and run elocos on the route.
In recent years, the traffic on IR has increased a lot. So, on most routes, there will be good return on investment for electrification. That's why they are going for electrification of most routes now.
That said, 100% electrification is really stupid. There are still many routes that do not have high enough traffic to justify electrification. Sometimes lobbying and political egos trump common sense. The 100% electrification aim is also on the same line.