Another way to think about it is that India is investing in an industry that creates profitable inter-industry linkages. By creating a space program you are cre

Another way to think about it is that India is investing in an industry that creates profitable inter-industry linkages. By creating a space program you are creating high paying jobs for educated workers who educate their children and eventually move to other high skilled positions taking their human capital with them. The space program also creates a circus of supporting businesses and industries, which are also "high value added" endeavors. So while being able to produce a spacecraft might not have a direct impact on the well being of the millions of Indians, you now have workers with in demand skills who can use those skills in other jobs, you have the ability to produce high precision machinery that can be used in other high value added applications. (See the 19th century cheese industry in Denmark if you are interested in a historical example.) You are brining money into the economy, which in turn goes back into things like schools and business investments. Look up Rasumssen and Hirschman for academic literature on this subject.