Short answer is yes, IF you drop something as big as a 580 in there you will be bottlenecked by the CPU, maybe not so much with some games, but current and future games are more multi-thread friendly. Also the PSU worries me.
If you drop a 560 in there however, I feel like you will see a better balance in parts (still a little lacking in the CPU department though). And with a 560 you could easily max MW3, ME3, and AC:R as these game engines aren't super demanding. However don't hope to play anything like crysis 2 or metro 2033 with that setup.
The MAJOR problem with your question is if you upgrade the CPU and MOBO, you also have to get ddr3 ram and possibly a better PSU and the budget is tight. If the budget includes the GPU too, than its actually impossible lol.
hehe yeah i agree. But that wasn't the case fortunately.
Well I can extend the total budget to approx 35000-40000 INR including GPU. And these things are more expensive in India compared to abroad.
I have zeroed in on the 560 Ti and the 2500k What RAM, mobo and PSU I shoud buy?