So, in that environment, building an ICBM (which is btw a very hard engineering challenge and took India 30 years) is an achievable goal for an individual actor (the defence organization DRDO) and because it was an Indian success, brings pride to a nation of 1.2 billion. Getting rid of corruption will make our lives significantly better (there are many other much more modest goals that will have a similar effect), but it won't bring close to as much pride. In a country where you'd die before driving a Tata Nano if you had any semblance of money (Tata Nano is seen as a cheap car - something not to be proud of) and an iPhone is a must have, such sources of pride as an ICBM count for a lot.
Yes, we are flawed, but as we say, "what to do, we are like this only"