Similar to SpaceX and most other space programs, they take from the research and technology developed previously to implement their own version.
For example, NASA developed different forms/methods of long distance communications which allow the spacecraft to communicate with the ground. That 63 million for development of the ISROs Mars Mission takes advantage of that. Saving cost.
Further, because some to many of the parts have been produced for decades and NASA retired their rockets, there are parts "on the cheap."
I think there have been a lot of lessons learned and tech transfer from earlier lunar and Mars missions. Chandrayaan-1 involved a lot of experts from NASA and ESA, for example, because both agencies had instruments on board. (I'm acquainted with one of these payload specialists.)
Some of the willingness to do that tech transfer is basically boosting India as a counterweight to China's space ambitions.
Also, remember that Chandrayaan-1 failed early. It's a steep learning curve.
http://articles.economictimes.indiatimes.com/2013-10-31/news...