Since you have specifically mentioned inkjet printers, that takes away the compact Dye sublimation thermal transfer photo printers like Kodak Easy share printer docks ,Canon Selphi etc.Canon has atleast three with a list price of Rs.5995.You may still have a look at them and also their HP cousins.
Canon IP 1000 suggested above is no longer listed and its place has been taken up by Canon IP 1880 (list price Rs. 2995). It uses three color ink cartridges.
Since you have indicated that your budget as Rs.5000/-, I would recommend that you look for 6 color ink printer.
What comes to my mind immediately is HP Deskjet F4185, which you can get for a street price of Rs. 4600 to 5000/-. It is an all in one but does not compromise in photo printing.The black ink cartridge can be replaced by another 3 color ink cartridge to make it a six color inkjet printer giving pro lab-quality photo prints which have been acclaimed as better than what Epsons and Canons produce.(though I have one, I have not tried photo printing on it, since I use the Kodak Easyshare Printer dock for photo printing. I consider thermal dye-sublimation printing duplicates the real photo-printing process rather than the ink-jets - may be a personal prejudice
). Look into a recent review
http://www.pcworld.in/features/index.jsp/artId=4361
There may be other photo printers (not all-in-ones) that could fit into your budget but definitely go in for 6 color inkjet printing if you want really good prints.
colour inkjet for photo printing
Linear Mode
