Disinflationary pressures allowed the RBI to cut its main policy rate early this month by 25 basis points to 6 percent, the lowest since November 2010.
It was the first easing by an Asian central bank this year.
But the RBI retained its "neutral stance" and warned inflation could pick up again.
The RBI expects retail inflation could accelerate to 3.5 percent to 4.5 percent in October-December.
The government called on Friday for more rate cuts as it flagged risks to economic growth and budget targets.
In his mid-year economic survey, Chief Economic Adviser Arvind Subramanian said there were downside risks to the official growth forecast of 6.75-7.5 percent for the fiscal year to March 2018.
India's industrial output unexpectedly contracted 0.1 percent in June from a year earlier, data showed on Friday.
The launch of a national Goods and Services Tax (GST) in July has caused chaos on the ground as complex rules have left companies confused on how to price their products.
Combined factory and service sector activity slumped in July to the lowest since March 2009, according to one private survey, though analysts believe the disruptions from the new tax will
start to moderate soon and longer-term it will boost domestic trade.
Economists still expect the RBI could cut policy rates by 25-50 basis points this year.
In his report, Subramanian said there was a considerable scope for monetary easing as the inflation was undergoing a "structural shift."