Since you already have a lcd monitor this is what I would suggest.

Processor: Intel E2160
Motherboard: DG31 PR Intel
Cost of processor and motherboard: Rs 5500

Ram : 1GB DDR2 667 Rs 750-1000
HDD: 250GB Seagate Rs 2200

Case + PSU: Rs 2000
DVD RW : Rs 1300

Total comes to around 12 k. The above configuration is very good but lacks a gpu capable of playing games.

Only buy a new computer if you really must. Else the current configuration which you have is perfect for day to day work and mild gaming.