Hello Karan,
Your budget is to low to get a fully managed VPS. at this price you
will get shared hosting which won't allow you to change server config.
And you might be able to get an cheap VPS at this price but its
quality or performance is doubtful.

My Suggestion:
Arrange it a creditcard from somewhere and sign for Amazon EC2 which
is free for first year as part of their "Free Usage Tier". this is
what you will get:

AWS Free Usage Tier (Per Month):

* 750 hours of Amazon EC2 Linux Micro Instance usage (613 MB of memory
and 32-bit and 64-bit platform support) – enough hours to run
continuously each month*

* 750 hours of an Elastic Load Balancer plus 15 GB data processing*

* 10 GB of Amazon Elastic Block Storage, plus 1 million I/Os, 1 GB of
snapshot storage, 10,000 snapshot Get Requests and 1,000 snapshot Put
Requests*

* 5 GB of Amazon S3 standard storage, 20,000 Get Requests, and 2,000
Put Requests*
30 GB per of internet data transfer (15 GB of data transfer “in” and
15 GB of data transfer “out” across all services except Amazon
CloudFront)*
* 25 Amazon SimpleDB Machine Hours and 1 GB of Storage**

* 100,000 Requests of Amazon Simple Queue Service**

* 100,000 Requests, 100,000 HTTP notifications and 1,000 email
notifications for Amazon Simple Notification Service**

10 Amazon Cloudwatch metrics, 10 alarms, and 1,000,000 API requests**

performance of amazon AWS is top-notch but the catch is there won't be
any software level support. you will have to manage the server all by
yourself.

Hope it helps

Regards,
Gaurish Sharma

[1] http://aws.amazon.com/free/

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