120 usd/month is about 200 Rupees a day - you do not need to look that hard to find accommodation&food in India for that amount.
I was in Northern India about 4 years ago for 2 months, and traveling (which is several times more expansive than just staying in one place, especially since I ate at restaurants and did all kinds of touristy things) cost me about 300-400 usd/month.
Well, I haven't heard of any other accommodation that cheap, but you're right, there are options in the same ballpark. Don't forget that prices have gone up substantially since the last 4 years.
I was in Northern India about 4 years ago for 2 months, and traveling (which is several times more expansive than just staying in one place, especially since I ate at restaurants and did all kinds of touristy things) cost me about 300-400 usd/month.