Because of many reasons Speedy.
One being that they have been at the controls of many of the accidents here in Indonesia. While I'm not pointing the finger at them outright, as there has been an Indonesian captain sitting in the left hand seat... some of the stories that has come out about the 200hr wonders in the right hand seat has been mind boggling.
The other reason about the poor conditions is that Lion knows that they can offer Indian pilots those wages and they will take them without batting an eyelid, just so they can get ahead. Or at least get a job.
You only need to look back at a lot of the Indian pilots who offered to continue to work for free in India while some of the airlines were struggling. Just so they could build that jet experience.