So, yes there are people starving in India. Are you telling me there are no people starving in any of the first world countries? India is by no means poor and it is doing a lot to give the under privileged support. For the sake of argument, lets assume India is indeed extremely poor and begs for foreign aid, does that mean it has no rights to do anything to push itself out of it? It shouldn't invest money into something that will help it in the long run?
India has satellites that monitor weather conditions, used by farmers to aid their crops. India uses the weather satellites to monitor Tsunami and other natural calamities that occur along its costal borders. After the tsunami, it has only increased its focus on these endeavours. I guess you'd be happier if it didn't take any preventive steps and then you'd have a new angle to blame the country by saying its not doing anything to prevent calamities and depends on foreign aid to help it sort disasters.
Another angle is, India has neighbours that are not in good terms with it. They are aggressive and tend to show their muscle in both defence technology and space technology. India's space initiatives are also to let their neighbour know that the country is very much capable of countering any threat. I see this as a preemptive measure to counter any possible aggressions towards it.
India has numerous scientists and engineers. Instead of giving them jobs, it makes sense in letting them go to find employment in other countries? Let the scientists educated in India (the government invests a lot for exceptional talent by spending for their education) go ahead and find a job in NASA and other space agencies because India has provided them education, but not a job?
Finally, irrespective of the facts mentioned above, India uses its Space technology to launch satellites for other countries as well and they get paid for it. Any business will try to market its business to get more customers.