Yes i need a monitor also.
Below is the config that i came up with the suggestions you guys have provided.
Intel C2D E7200        - @5475
MSI P35 Neo-F          - @4850  
       
[ MSI P45 Neo-F        5850  - I am not planning for OCing, even if i do it's only going to be a mild one. Considering this will i be having any advantage on going for  P45 instead of P35 @Rs.1000 extra 
]
Palit 8500GT  1GB DDR2 PCI          - @3800 
      [ Below 2 other models are Rs.1000 higher of each other. 
           8600GT    1GB     DDR2 PCI         4850 
           HD 3850   512MB DDR3 256Bit     5825 
  Considering value for money, how will you rate them against 8500. 
  Having a video ram of 1GB will this have any advantage in comparision with 
  HD  model with 512 MB? Please share your thoughts.
]
Transcend DDR2 2 * 2 GB 800 Mhz        - @3800
WD Caviar 640GB        - @3900
CM EP 600W PSU        - @3350 
[ I have no idea about PSUs, so please ignore me if this question seem silly 

: 
  Will i be really needing a 640 W PSU when i am planning on normal setup and no OCing ?]
CM Elite 330 cabinet      - @1850
LG H55n optical drive    - @1500
Altec Lansing BXR1121   - @1125
Logitech kbd+mouse      - @1350
Samsung - LCD - 17 '' 732N    - @8850 [ I prefer a 17'' LCD. will this be a good Option? ]
        Total:     39850
Please share your thoughs.
Thanks,
TechHunter.