You can easily buy a Linksys WRH54G Router for your purpose, it is a good one and easy to use. It is priced somewhat Rs. 1600 and has support for Wireless b/g and SP1 firewall, DHCP, built-in 4-port full-duplex 10/100 Switch to connect etc.
For the full feature sets, please check
http://www.linksys.com/servlet/Satel...=9405239789B03
BTW I also have Home 500 connection from BSNL BB and currently using the default modem (WA3002-g1) given by BSNL.