I agree. If you go for changing and replacing everything you shall be spending too much on it, which shall never be recovered. Your priority should be to make it a safe and reliable car as long as you keep it.
You have not mentioned functionality of the mechanical parts. The reliability of car and its safe drive requires a thorough assessment. The condition it is in tells that it might need complete suspension work. Other mechanical work required should be assessed; clutch plate replacement, timing belt replacement, radiator flush, oil & lubes, spark plugs, engine mounts, brake system components etc. should be given highest priority.
As far as exterior is concerned, first get its partial denting done, only of the body panels that are out of place, not aligned (visible left side front and rear fenders, trunk etc.) and having prominent looking dents. Then get the rust removed from some panels (visible right side rear fender, bonnet etc.). Then go for compounding and polishing. Most of the faded paint shall be restored. Then go for paint touch up on panels whose paint couldn't be restored. No need to spend 50 thousand rupees on whole body work.
Tire needs replacement too. It also comes under reliable and safe driving. Please don't compromise on these.
