Practical reasons!
Note this was 1979...
Some reasons are...
1. Diesel engines were shiny new imports from either ALCO or GE, there weren't enough crew trained to handle diesel locomotives.
2. Diesel was expensive...
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still is, coal is and was more dirty cheap back then.
3. Steam engines were reliable and if they broke down often fixing was easier. Diesels engines like the WDM-2s and WDM-4s were new then and hadn't really established their famed legends of reliability that would later make them relevant even today.
4. Training steam loco pilots were easier, steam loco sheds were a plenty, Sitarampur, Jhajha, Asansol, Dhanbad, Pathardih were all steam loco sheds within 100 kms of each other.
5. Government jobs weren't as fancy and sort out as they are today. Payment was very less and working conditions not very helpful. Unions were still not prevalent as they are today !
6. Train MPS and average speeds were low, Toofan had already attained it's crawler status even then, and steam engines were more than sufficient for the job.
Infact steam engines became extinct much more recent than you may think. The steam locomotives running on the Dhanbad-Chandrapura line of ER's Dhanbad Division almost saw the light of the new millenia before fading into the pages of history. Even though I was very small, I still remember some of those steam journeys. Trying to look outside would be such a pain owing to sheer volume of smoke and coal-dust that the locomotives spewed. In contrast the diesel locomotives were much more forgiving to your prying eyes.....

It was only 'Toofan express' at that time. The merger with Udyan Abha came later. :)
It used to run with a WAM1 till Asansol and switched to the ER standard green livery WP between ASN-MGS and was taken over by a red NR WP from MGS.
Like Arnab mentioned, diesel locomotives were still in small numbers at this time. 'Up-starts' and prestigious trains were the first preference for dieselization. The Toofan had lost it's sheen by then, and the 11/12 Howrah-Delhi...
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(Later named Lalqila, then 31/32 KOAA-ANVT, now the 31/32 running between KOAA-Patna on a crawler schedule) was given priority over the Toofan for dieselization. Jhajha homed ER's largest steam shed and provided the running powers for the trains taking the main line. Many trains over the main line and the Sahibgunj loop continued with steam traction well into the 80's. Vikramshila used to run with a WP between BGP-Kiul and continued with a diesel after that.
And just a bonus for admirers of the Toofan - The 1974 Satyajit Ray thriller 'Sonar Kella' has some accurate depiction of travel by the Toofan in the mid 1970's. The movie shows the Toofan departing from Howrah at 9:35AM, with a WAM1, and pulling into Kanpur the next day, delayed by a couple of hours. You can watch the movie in the attached Youtube video . From the 25:50 mark, the protagonist is at the Howrah station and you can hear announcements for the departure of the 7Up Toofan and later see the Toofan pulling out of Howrah with a WAM1 in the lead.