Does publishing a manuscript in a respectable journal increase chances of getting a scholarship? I am a second year physics undergraduate in a not so famous University. However, I have constantly received top marks in my class and I have just published a paper of mine in one of the highest ranking journals in my field, with reviewers expressing extreme interest in my work and I am working on a second paper. My question is will this help me get a masters scholarship in a western university?
Definitely!  Why 'Masters'? If what you said is true, then aim for a PhD.  I am sure any universities will offer you a scholarship when you wave your marks and paper at them.  

Note: every university has a fixed number of scholarships.  So if one doesn't give you a scholarship, don't be too discouraged. It just means there are students with a better CV than yours.  However, there are many universities and only a very small percentage will have that kind of CV.