You can buy single quantities of ARM-based netbooks & tablets from China for under $90 a unit, including international shipping.(^)

So your estimates line up with that experience. I'd guess that if the Indian government really wanted to provide a lot of these to school students, they could bring the cost down a fair bit by either bulk-buying or bulk-producing, though.

I'd be interested to find out what the intended OS is, and what the plans for providing suitable useful educational software are, though.

(^) For starters, http://www.dealextreme.com/search.dx/search.WM8505