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Yes one can live with US $5k in a small city in India for a year, but not including the air fair to get here.

unless you're planning on living near poverty levels, to recreate US lifestyle in India you will need min. $1k/month (INR 70k).

I live in Bangalore spending Rs 20k a month. I live in 1 BHK with my wife and give Rs 10k in rent. Other expanses are around 10k or less.

One can have lavish lifestyle in Rs. 70k per month.

If you see yearly expanses , It will come at around $5000 , equivalent to Rs 350000

Can you really live in India for a year without getting in trouble? (assuming you're not an Indian citizen)

i.e. Schengen is 90/180 days