I think by 35k for processor he means 35k for whole CPU.
1. E8400 @ 7500
2. MSI P45 NEO-F@ 6000
3. Transcend 2GB 800Mhz @ 1800
4. CM 500W/600 or Corsair 450W @ 3000
5. GFX Card : Palit HD 4850 @ 9500
6. Cabinet : Zebronics Bizli/lava @ 1400
7. Hard Disk: WD 640GB @ 3600
8. Speaker Creative SBS 2.1 @ 1200
9. Keyboard/mouse Logitech/microsoft 700
Total Cost: 34700
now I think you will get these things a bit cheaper then mentioned.
If you want a total gaming machine then the components red font are must don't go less then this.