We had some trouble finding a decent budget hotel in Amritsar. After scouring the web for any sort of recommendation, we settled on Hotel Holy City.
The location is good - about a five minute walk from the Golden Temple, and the old man on reception is quite pleasant.
I would recommend looking at a few rooms before committing - I settled on a non-a/c room on the first floor which had a window and didn't smell of damp (unlike the others I looked at). The room had a good fan, we didn't feel the need for a/c.
As with most budget places in India, the room was far from spotlessly clean, but the sheets and towels were laundered (if a bit worn) and the floor swept. We had hot water and decent water pressure in the bathroom.
I wouldn't linger here, but it's fine for an overnight stop in Amritsar.
As well as the Golden Temple, do try to get to the India/Pakistan border ceremony - very entertaining, one of our favourite India experiences!
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