Yes as said by acewin Updgrading Only Mobo & RAM without Processor will be total waste
Instead go for all 3
Get a
Intel Dual Core (E5200) 2.5ghz for Rs. 3400/3500
Gigabyte G31M S2L for Rs. 2400
(link) or
Transcend 2GB RAM for Rs. 1100/1200
(Please dont by dynet Ram it comes for 900rs. but has worst performance/speed)
other Motherboard Option (as per your budget)
ASRock N73V-S for Rs. 2700
(link) or
Gigabyte G31-S3L around Rs. 3500
(link)