NEW DELHI (Reuters) - The government has decided to raise the price at which it will buy new-season wheat from domestic farmers in 2017 by 100 rupees, a senior government official told reporters on Tuesday after a meeting of the federal cabinet.
The official, who declined to be named as he was not authorised to speak to media, said the revised purchase price would be 1,625 rupees ($23.98) per 100 kg compared with 1,525 rupees a year ago.
Higher purchase prices are aimed at boosting wheat output. The decision will also help Prime Minister Narendra Modi's Bharatiya Janata Party woo millions of farmers, an influential voting bloc, ahead of a crucial state election in Uttar Pradesh, a key wheat producing state.
India, the world's second-biggest rice and wheat producer, buys the grains from local farmers at state-set prices to build stocks to run a mammoth food welfare programme which covers about 75 percent of its 1.3 billion people.
($1 = 67.7605 rupees)
(Reporting by Mayank Bhardwaj; Editing by Malini Menon)