Considering India's GDP growth rate is among the highest in the world, I'm not sure if they ought to be listening to advice from nations with stagnant GDP growth or negative GDP growth.
Fix your own economy first before preaching. And if you believe your own words, don't breathe, don't take bathroom breaks, until you get out of a recession.
Keep in mind that India's space program is a profit-center. It actually _earns_ more money than the govt. spends on it. That's because placing satellites into orbit is big business, and high-tech services like satellite launches sell for hundreds of millions, if not billions of dollars.
South Korea and India were of similar economic situations in 1950, the difference being that S. Korea poured money into technology, and India did what you suggested. Guess what? Getting homeless people to fish just creates lots of poor fishermen instead of lots of poor beggars. Big whoop. The goal is to create more jobs for scientists, physicists, researchers, lab assistants, programmers, etc.
Plus, India's tax rate is far lower than in Western Europe, and 90% of people are not taxed. So the amount they spend is a tiny drop in the bucket of the annual income of people.
Wikipedia:
http://en.wikipedia.org/wiki/Income_tax_in_India#Tax_Rates
"about 10 per cent of the population meets the minimum threshold of taxable income"
So 90% of the population pays 0% taxes. And the progressive tax rates for the remainder of the population go from 10% to a maximum of 30% tax.
As for literacy, the "majority" of Indians are not illiterate, 32% are illiterate as of 2007, which is still a big number, but not a majority. Much of that illiterate population was born circa 1950. In the age group 7-15, literacy is 90% (10% illiterate).
Moreover, your presumption that they "prefer to spend their money being number 6, than cleaning up their house" is childish if not outright moronic. India's economy is $1.2 trillion dollars, and the project costs $270 million. That's 0.02% of the economy. To put that in perspective, that's equivalent to a 19 second bathroom break a day. And let's not forget that the project could be profitable, and in the very least provides good high-end jobs for their increasingly educated population.
Compare $270 million with the numerous welfare and social programs India provides to poor people. $13 billion to subsidize food for low-income families. $12 billion to subsidize fertilizer for poor farmers. $7 billion for education (at the federal level, states pay more). The list goes on for social programs that are all near $10 billion each.
In the end, they have a democracy and if folks don't like the budget, they'll elect other folks in. Every nation's budget is going to have cutting-edge R&D. It's ludicrous to suggest otherwise. Overall, their nation is doing fine, rapidly progressing with envious growth rates. It's not _your_ tax money being spent (and even for Indians, it's only the tax money of the upper 10%), so relax and let them build a nutrino research facility. If you're interested in nutrinos, I'm sure they'll love for you to pay them money to use their research center.