July 4, 2018 / 7:22 AM / a year ago

India raises new season common rice purchase price by at least 13 pct vs year ago

NEW DELHI, July 4 (Reuters) - India has raised the price at which the government will buy new- season common rice variety from domestic farmers by at least 13 percent, a source said, as the government looks to woo millions of farmers ahead of general elections due early next year.

The source did not give further details.

The government had fixed last year’s local rice purchase price for the common variety at 1,550 rupees ($22.63) per 100 kilogrammes.

Prime Minister Narendra Modi’s government said in its February budget that it would buy crops at 1.5 times the cost of production, a major shift after keeping the so-called minimum support price in low single digits over the past three years.

Analysts and economists have warned the move could help push up inflation, add to the fiscal deficit and prompt India’s central bank to raise interest rates more steeply than expected.

$1 = 68.5025 Indian rupees Reporting by Nigam Prusty; Editing by Malini Menon

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