Yes, You are right. It will be using flash memory as its RAM. Probably, it's own storage memory.
And to all the users, its price is not Rs.2500. It is Rs.2200. I think you are multiplying $25 with 50 to get the price in Rupees. Let me tell you that value of 1 $ is Rs.46 currently. Multiply 25$ with 46, you get 1150, which is nearly Rs.1100 (which is the price of the tablet after govt. removes 50% tax). Now, the finalized price is Rs.2200 not Rs.2500.
Also, it is not an International tablet that you are saying "the 25$ tablet". It's an Indian tab so call it in Rupees.