Thanks R0j0. For drawing straight lines, I am not using canvas plugin...Just drawing them by spawning a sprite . So I was able to implement the erase functionality on the lines etc., Initially, I used the same method ie., spawning small lines to make an arc/cricle so that it becomes easy to erase using collision checking. However this method of drawing circles /arcs is causing performance degrade and hence I planned to implement specifically arcs & circles using canvas plugin. Using canvas alternative, the performance has definitely improved but with a sacrifice of eraser functionality.
I could think of implementing something like undo/redo from the methods you suggested but pick & choose a particular arc OR a circle on the canvas and erasing it sounds beyond my ability using the canvas plugin. So looks like I have only one of the options left - I will have to sacrifice performance and go back to my earlier method of drawing circles/arcs w/o using canvas OR sacrifice the erase functionality on circles/arcs while using the canvas plugin.
Given this, any feature on how we can check for overlap or collision on canvas objects will be a great addon to canvas, if that is possible.