Reserve Bank governor Shaktikanta Das on Friday said the monetary policy has to be "clearly and unambiguously" focused on inflation in an environment like the current one, where growth is steady.

Amid a debate around neutral rates, Das said "theoretical and abstract concepts" as arrived at are based on a person's judgment and cannot determine the policy in the real world.

It can be noted that the RBI has been steadfastly maintaining the status quo on interest rates, and there is increasing dissent among some members of the rate-setting panel who are in favour of rate cuts to promote economic growth lately.

Replying to those who flag the impact on growth because of the elevated interest rates, Das said that the growth has been robust even with the current interest rates and added that RBI is optimistic that its 7.2 per cent real GDP expansion estimate for FY25 is being achieved.

This view comes at a time Jayanth Varma, who is an external member of the monetary policy committee (MPC), has maintained the current real policy rate of around 2 per cent (based on projected inflation) is well above the level needed to glide inflation to its target.

Amid his indication that inflation should align with the target for interest rates to be cut, the RBI governor added that the central bank’s relations with the government have been "smooth" during his nearly six-year term. He also credited the close co-ordination between the two for the quick revival of the economy after the pandemic.

Drawing from his favourite analogy of the elephant in the forest, wherein he compares the animal to inflation, Das said the elephant is "grudgingly" moving towards the forest, which is the 4 per cent inflation target.

The movement down to the target is unidirectional, but there are pauses taken by the distracted 'elephant' who is moving slowly towards the "forest", Das said.

Das, who has poured cold water on hopes of an early rate cut in the recent past, said that the RBI’s relations with the Centre was “smooth” – arguably the first time that he has commented on a very sensitive subject.

Former governor Duvvuri Subbarao had a running battle with finance minister P. Chidambaram and Kaushik Basu from 2011 onwards as he resisted pressure to cut rates and pump prime the Indian economy after the global financial crisis in 2008.

"I am saying from my experience. Nobody expects RBI to be a cheerleader. I have had no such experience," he observed responding to a specific question about a lament made by one of his predecessors in a recent book.