What the Indian government needs to do is come up with a linux distro that will run on old discarded hardware and contain educational applications. A lot of the costs involved in building a new computer platform are redundant when there are already a bajillion old discarded PCs that one can buy for around $35. One thing Indians and most developing nations are good at is fixing up junk and making it useful. A government supplied distro that comes with educational videos, sounds and images, a local copy of wikipedia, and a simple platform that the masses can use for writing applications such as a grain price monitor, and a usable UI written in hindi (and later on in regional languages) can go a long way in achieving their aims.
The government already owns BSNL which has a huge cellphone network throughout the country, and they can start a low-speed internet plan (available only to those with a
ration card). They can collaborate with someone in China (say huawei) to manufacture PCI cards and USB dongles that can use the GSM network for data.
The problem is not hardware as much as it is software and content. If you were to subsidize and hand a netbook to every child and poor person in the world today, you couldn't expect them to use it for educational or professional benefits. They'll just log on to facebook and watch Justin Bieber videos. Just recently we heard a story about how computer use does not correlate with higher grades in developed nations. What makes people think it would be any different for a developing country?
As a middle class schoolkid in India, I would've been delighted if there was something else apart from just black and white books that I could learn from. Instead of just reading about concepts, it would've been cool if I had access to simple videos of what an atom probably looks like and speeches delivered by mahatma gandhi. Or a simple geometry application in which you can draw circles and triangles to learn about them without wasting paper.
What India can do is get together a big enough team of developers, schoolteachers and social workers to write applications and compile content for this $35 computer, integrate it into an OS distribution that will run on any x86 processor above the 486 and is portable to other platforms, and then get NGOs to install this on old machines and deliver them to the poor. When they run out of old machines to use, then, maybe they can come up with a cheap x86 or ARM based laptop that has a cheap screen, a keyboard and a pointing device and can run this OS.
My point is that there are greater educational returns for the government of India in spending money in compiling a good software distribution and getting the masses involved early instead of starting another Simputer project that leads to nothing.
To those who do not believe a computer can be made for $35, I'd point to the cheap-ass Nokia 1000 series phones that are the mainstay of the cellphone revolution. These devices can still run simple applications such as games and e-wallets, etc., play MP3s, and some can even read flash memory cards. If one could just write some applications for them and increase the screen size, bingo.