Needless to say, it is in India's long term national interest to resolve the dispute quickly. However, it is not in the government's interest to offer any sort of compromise, and hence wouldn't touch the issue with a bargepole (A textbook example where national interest is superceded by political interest in a democracy).
It is abundantly clear that China wants the dispute resolved as quickly as possible. (For one, it doesn't have such a strong and ill-informed public opinion to contend with) It understands that friendly relations between neighbours cannot be fully achieved as long as the mutual border is not clearly demarcated. It has offered significant concessions to India, keeping only the minimum territory which is strategically important to it (because of the Aksai Chin road). It is willing to recognize Indian claims on the populated portion of the disputed territory, keeping only the barren desert land of Aksai Chin, where according to Nehru himself, 'Not even a blade of grass grows'.
But Noooo! The Indian government seems to think that it has a mandate from heaven to keep ALL the disputed territory for itself, and will not offer any concessions whatsoever. It will not accept 74% of the total disputed territory that was part of the deal offered by China (heck, it won't even accept 99.99% of the territory if China offered it!), but wants the whole 100% disputed territory for itself!
Hence, in simple terms, what the Indian government seems to be saying to its Chinese counterpart is, "You can scratch my back all you want, but I am certainly not going to scratch yours".