A decent basic router for ADSL will cost 1400 and above. That represents 28 months of rent to MTNL. Taking into account the rate of obsolescence in computer hardware, I would go with the rental option.
other factors:
1. If you are likely to switch to a unlimited or combo plan it is rent free.
2. If you have a technical problem, MTNL becomes a single point of responsibility if it is their router.
3. If you decide to switch operators and the new one doesn't use ADSL then you don't have to throw away your old router.
4. If you decide to go for a Wireless router or 4 port router later your investment is not wasted.
If you are taking a new connection with MTNL, I suggest you ask for the wireless router. The rent is the same and you will later on be able to use WiFi for a laptop or a mobile phone connection to the internet.