Im from India. My Budget for the AV receiver and Speakers is INR 50,000 approx 750 USD.
Say a model like
YAMAHA HTR-2067 AV RECEIVER+5.1 CH+CINEMA DSP+EXTRA BASS+4K ULTRA HD+HDMI 3D
(Costs Approx 25K INR) plus the needed speakers (Another 25K) should be fine I think..
Kindly guide me whether this is fine.
I think that Yamaha receiver is perfect.
From experience, for speakers, I can recommend the Pioneer FS-52 and BS-22. I see that FS-22 is available on Amazon.in but not the BS-22.
The FS-52 (floor standing speaker) will consume the other half of your budget, but I think would be so impressive to you, that it might be worth only having 2 channel stereo, and then buying the other speakers later.
Subwoofers cost money. Period. Think about it, you have a sturdy, thick box. An amplifier. And a big magnet needed for the woofer. Compromise any of those and that subwoofer may sound worse than no subwoofer at all!
If the FS-52, a tall floor standing speaker, is an option for you, I think that would be a wise investment because alone, that tower speaker will play a broader range than all of the speakers they replace! Even that cute little subwoofer you have!
And then save up another 30,000 - 50,000 INR for a subwoofer. And THEN you can buy the matching center channel and the BS22 for rear surrounds.
I suggest this simply because just those two FS-52's will sound so significantly better than what you have, that I think the additional cost of subwoofer/surrounds more than justifies the expense!
If you want to go deeper, tell us about the room these will be played in. Provide dimensions, metric is fine. Is there a photo? What kind of furnishings are in the room? Hard floor and walls? You may need a rug!