Indian government plans to announce the sale of a 10 percent and 15 percent stake in state-run Life Insurance Corp in the next week’s federal budget as part of the privatization push to improve public finances, two government sources said.

FinMin Nirmala Sitharaman’s plan to divest government control of large companies such as Air India and Bharat Petroleum Corp Ltd failed to make much headway in the current fiscal year because of the pandemic, as per Reuters report.

Now the government is renewing its drive to sell stakes as it tries to shore up revenues following the deepest economic contraction in decades.

One of the sources said the government will enact changes to a parliament law governing LIC, which has assets under management amounting to over $400 billion.

"To facilitate the sale of government stake in the LIC, the government will get a parliament approval to amend the LIC Act," the first source said.

The official also said that the government has announced its plan to sell its stake in LIC last year that was delayed by legal and administrative hurdles.

The government also plans to sell its stakes in IDBI Bank, Central Bank of India and Punjab & Sind Bank, said a second source.

Together, the plan is to raise Rs.2.5 trillion to 3 trillion ($34 billion to $41 billion) in the next financial year, officials said, partly to set off the shortfall in the proceeds this year.

They spoke on condition of anonymity because they are not allowed to discuss budget plans with media.

Aiming to boost lending in the economy and improve the valuation of state-run banks before selling stakes in them, the government could announce creation of a bad bank, where toxic assets of banks worth billions of dollars would be transferred, the source said.

The objective is to park bad assets of state-run banks into the proposed bad bank and later sell those assets at a discounted price in the market, the official said.

"It will help clean up balance sheets of the banks and improve their valuation."