I have a Cannon Power Shot camera. Have been using that for the last 5 years and still takes good pics. I preferred Cannon because it's a very good brand for cameras but I know that Sony too is good. Make sure there is powerful digital zoom apart from the optical zoom and that there are lot of mega pixels. Also if possible try to buy one of those slim ones, as you can carry that in your pocket daily with you to capture those unexpected moments of life.
I am sure for Rs. 40,000 (USD 400) you can find a very good camera.
Go to Amazon.com and search for cameras and check for the ones most popular and buy a similar one from SL.