India plans to reform rules governing the level of discounts upstream state oil firms including ONGC offer to retailers, a senior finance ministry official said, a move that could expedite the sale of a stake in the company.

The government hopes to sell shares in ONGC and India Oil Corp to raise about a third of its budget target for asset sales of $11 billion – and reduce its fiscal deficit to 3.9 per cent of GDP in the 2015/16 fiscal year.

Currently ONGC (Oil and Natural Gas Corp), Oil India and Gail (India) sell crude and fuels like cooking gas at discounted rates to partly compensate retailers for losses they incur on selling fuels at government-set rates.

But the finance ministry and oil ministry are in talks to work out a mechanism for easing the subsidy burden for the upstream companies, Ratan P. Watal, expenditure secretary at the Ministry of Finance, told reporters.

Earlier, sources told Reuters that the oil ministry had set a new subsidy formula for the April-June quarter that would exempt upstream companies from discounting sales of crude oil and refined products if global oil prices are up to $60 per barrel.

India had to defer plans to sell a 5 per cent stake in state-run oil company ONGC last year as investors wanted a clarity on subsidy payments, which had previously been set by government decree, creating uncertainty around its earnings outlook.

Market experts said that if talks between the two ministries lead to the temporary subsidy arrangement being prolonged, that would make the ONGC stake sale a more bankable proposition.

“Investors have been asking for more clarity on ONGC’s subsidy outgo, and that will be key for a divestment to take place,” said Mahesh Patil, co-chief investment officer at Birla Sun Life Asset Management.

“We still need to see what the final formula is.”

Finance Minister Arun Jaitley gave a bullish view on asset sales, telling a news conference called to mark Prime Minister Narendra Modi’s first year in power that deals worth 500 billion rupees ($7.9 billion) were “in the pipeline”.

Officials worry that a downturn in the Indian stock market, which has unwound most of its gains for the year, could hurt government fundraising plans. India has missed its privatisation target for the last five years in a row. ONGC shares rose 1.5 per cent. They have shed 18 per cent in the year since Modi’s election victory, while the benchmark Sensex Index is up by 15 per cent in that period, according to Reuters data.