The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai, Oct. 29, 2013. Reuters/Danish Siddiqui

(Reuters) - The Reserve Bank of India (RBI) lowered its policy repo rate by 25 basis points to 7.5 percent on Wednesday, delivering its second cut this year on the back of easing inflation and a government commitment to fiscal discipline.

The RBI had lowered interest rates by 25 bps on Jan. 15. Both rate cuts this year have took place outside of the central bank's scheduled policy review meetings.

The rate cut marks a vote of faith in the government, which on Saturday pledged to be fiscally responsible but said it would take an additional year to meet a fiscal deficit target of 3 percent of gross domestic product.