Sony DSC w5 will be the best choice. My friend have it. But its expensive compare to Canon. In my opinion - best way to search for a digital camera is to browse
http://www.ebay.in/ They advertise diff. digicams from diff. companies and its about Rs 100-200 up and down from many shops.
if you can manage to raise your input money a lil, go for SONY, but canon is more user friendly, as i heard.
I got samsung digimax35 3-in-1 old model, and im planning to buy a miniDV camcorder instead, as the price does go down lots, specially in festival times.
So look out for such times.
peace