Sell the P4 and motherboard. Yes wont fetch much. But trade your DDR-I with a 4GB Corsair XMS3 1600 MHz DDR-III easily.
So get following after selling the processor + motherboard
Processor -> Intel Pentium Dual Core G645 @ Rs. 3500/-
Gigabyte Motherboard for LGA1155 -> Let people suggest @ 3500 range
ATI HD6670 1GB GDDR5 @ Rs. 5k
Trade the present RAM with a Corsair XMS3 4GB DDR-III 1600 MHz
el chepo PSU of 450w @ 500~700
Total comes at around 13k
3k more than your present budget
If really constrain with budget
then just trade the RAM and try to sell the motherboard and keep the processor and get following,
Trade the 2GB DDR-I with 4GB XMS3 1600 MHz
Keep the processor, thats the P4 HT 3.0 GHz
Gigabyte G41 Mobo @ Rs. 2800
HD6670 1GB GDDR5 @ Rs. 5k
El chepo PSU 450w at around 700
Total -> under your budget
and keep your eye open in second hand market to get your self a LGA775 Core 2 Duo processor in your budget later on to replace the P4 with that
, in case the card doesn't perform upto the task.