One possibility would be to swap the living room and the dining room. Since the current living room is larger than the current dining room you could still keep some comfortable seating (couch and upholstered chairs?) against the front wall for a keeping room/dining concept. Then your new dining areas (kitchen and dining room) and living areas (living and drawing room) would have good flow between them, which would work well both for family and entertaining. You could also add some builtin bookshelves in the drawing room or new living room to create a library area to add another fun element to the living areas. These bookshelves could be against the long walls in the drawing room, around the window with a window seat in the living room (former dining room), or built to create some separation in the open area between the drawing room and living room/stair area. Your plan seems to show some sort of builtin there, but I'm not sure what it is.

This will help get some light into the middle of your space. http://www.westelm.com/m/products/overarching-floor-lamp-antique-bronze-w890/?pkey=cfloor-lamps You could also do end tables or a console behind the couch and place table lamps on either. It doesn't look like you have any seating near the edge of your space and your existing lighting seems to be positioned at the edges of the room. So I'm not sure if sconces would help much.

What a beautiful house, Shahbaaz! I live in a similar house - a 150-year-old colonial bungalow in Kumaon. You have already received lots of excellent advice from better-qualified people, so all I would say is, keep its age and heritage character the central theme. The white tiles do clash, I am afraid ... flooring with terracotta tiles would echo the roof and look lovely. The columns and the arches over the doors and windows are amazing. But I'd say, leave it all chuna-painted - there's a beauty and softness to it. Don't let the painters add too much neel (indigo) in the limewash -- in the hills where I live, they put far too much if I don't watch out and the result is a harsh white. Natural lime has a softer, creamy look.

Hi! I'm so glad I came across your floor plan, got pretty excited and ideas started flooding. Firstly, I'm uploading a draft of a floor plan I made as a rough copy (with a pencil and a paper), so kindly excuse the imperfections. (please refer to the picture I've posted along with this.) Secondly, as you mentioned, you would want to include the balcony in your seating area, I recommend you to break the wall and instead use French windows to allow the light within and it'll also feel very open. Then, about the kitchen, as you said you wouldn't want a large dining area, you could take that space for an open kitchen, where the counter also serves as the dining space from the outside. And since, the kitchen would be made towards the direction of the arrow pointed (refer to the pic) we get ample space to make a Pooja room. And to give an enclosed feel to the living room I chose and L shaped couch for it. I would suggest you to go for a mounted TV on a rotatable stand on the wall so that its accessible from anywhere across the room. Having done that, we are still left with some space (marked with a circle in the pic ) which could be used to put some more seats for the living room OR... (THIS IS MY FAV PART IN A HOUSE!) you could also use that space to mount a swing from the top. There were few more probabilities to do this house, but I genuinely found this one to be the best, coz I'm a huge fan of open spaces, and it's a good layout a lot of things could be done with it. All the best.