Rameshwari, getting a house made, even a small one, is a tremendous undertaking. The easy way is to get a contractor to do it conventionally and pay through the nose. But if you want to get it done cheaply, using eco-friendly and local materials, you will need to work extremely hard, willing to take risks and go into uncharted territory, be prepared to acquire new skills and manage to get some of the people working for you to acquire new skills as well.
It's not easy but if you're willing to do all of the above, I'd suggest two methods, one was mentioned on this site recently, a simple Adobe cottage that cost less than Rs.300/sq ft. finished. I think that was a fine achievement.
A slightly more expensive but definitely more sturdier and longer lasting technique is earthbag construction. Look it up on Google, you'll find tons of resources, pictures, videos. If you'd like to pursue this, I can mail you a popular book on this describing the method in elaborate detail.
If you utilise used windows and doors, I think both methods should cost you in the range of Rs.1.50 to 2.5 lakhs for a 500-800 sq. feet house. Of course, if you opt for a smaller house, like in the case of adobe cottage linked above, you will get it done for much less.