The local media (and people) see this as something to be proud of, there is not much debate about the money being useful elsewhere.
Why is asking a question and being interested in the subject offensive?
As an Indian, I can see why some others could've found it offensive. Anytime ISRO does a newsworthy launch, some Western newspaper writes that the money could be used to build toilets. Sometimes, the newspaper is a rag, but Indian media prefers to cover that (sometimes more than the launch itself). So it's a touchy point. If I had not had my coffee, I'd probably be offended too. I think you were unlucky (vs having said something offensive).
[1] thehindu.com
[2] swarajyamag.com
[3] firstpost.com
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