i am a student from india and am in the process of filing my application for US student visa. I am in a dilemma as to what i shud enter as the normal duration of study--the period mentioned on my i20 form issued by the college or 24 months which is the usual time that it takes to complete an MS in the USA
The instructions for the form do allow for some leeway in the "how long do you plan to stay" question.  Still, you should call the office at your school that produced your I-20 form to make sure that they didn't make an error.  As you read, the I-20 specifically asks about the "normal" term of study.  If your school feels that 36 months is normal, put that on your DS 156.  But if you call them and they say that they made an error (which seems unlikely), then you should put whatever they tell you is the correct term of study.
It all depends on how long it takes to write the dissertation.  Most course work for the PhD takes about 3 -4 years (depending on the program)...what ends up making it take forever is that pesky dissertation...check back with me in about 7 years and I can tell you how long it took me to finish.