can he apply for an Estonian Schengen tourist visa?
He can certainly apply.
If visiting Portugal was his main intent and would be the country where he spends most of his time, Estonian officials may think he should apply to Portugal.
See top answer to Would Netherlands refuse entry for a Schengen visa issued by the French embassy?
If he plans to spend the majority of his EU visit in Estonia, then it is appropriate to apply there.
It is almost certain that Estonian officials will know all about his prior refusal by Portugal and will scrutinise his application with extra thoroughness.
As he was thinking he would get visa for Portugal, he left his job.
Unfortunately that is one of the worst things he could have done if he is subsequently to apply for a tourist visa.
He needs to prove that he has strong compelling motives for returning to India. Being unemployed weakens his case enormously.
Since he has strong motives for not returning to India (e.g. having a girlfriend residing in the EU) - his case looks bleak to me.
Creating a history of, or impression of, visa-shopping would only make things worse.
is 200,000 INR enough to show as a proof of funds?
I believe it is irrelevant. He ideally needs to show a steady income over many months with steadily accumulating savings. He needs to show that the costs of his proposed visit to the EU is proportionate to the unspent part of his annual income.
A bank account showing the sudden unexplained arrival of 200,000 INR is likely to destroy his chances of obtaining a visa.
See Should I submit bank statements when applying for a UK Visa? What do they say about me? - Although that is about UK visas, I suspect similar considerations apply to applications for Schengen visas.