Defending the government's decision to hold back disinvestment due to bad stock market conditions,

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the Planning Commission today said the process of stake sale in state-owned companies could begin after the improvement in market situation.

"Disinvestment will be decided by market conditions. So if market conditions are not normal, it is sensible for the government to hold back," Ahluwalia said in an interview to private news channel CNBC TV18.

He further said: "I don't think there is any change in the government's plans that we can realise the value of these assets over time. If the government decides not to disinvest in the certain period because it feels the stock prices are unduly low, that's not only understandable but it is actually quite a sensible decision."

The Department of Disinvestment is running against time to meet its ambitious disinvestment target of Rs 40,000 crore for the current fiscal. Till date it has been able to raise only Rs 1,145 crore through disinvestment in PFC.

In order to fast track the disinvestment programme, the DoD had sought opinion of concerned ministries for buyback of shares and prepared a list of cash-rich PSUs in this regard.

Several ministries like oil, power, steel, coal and mines are believed to have opposed the proposal as it could impact the business expansion plans of the PSUs.

Market regulator Securities and Exchange Board of India (SEBI) has relaxed norms for buyback of shares and dilution of equity by companies.

The new norms would help the companies to complete the process of selling shares within days against the normal process which can take months, a move that will facilitate offloading of government shares in central PSUs.

Ahluwalia said that timing of the disinvestment will be decided by market conditions.

"I think we will continue with the disinvestment and the timing of the disinvestment will be decided by market conditions. Which means that whenever we put a number in for disinvestment, it assumes normal market conditions," he said.

He also brushed aside concern about the impact of failure in disinvestment front and its impact on the government's fiscal deficit target of 4.6 per cent of GDP in 2011-12.

"If, for example, a certain amount of resources get shifted from one year to the next, I don't think that the impact of that on the fiscal deficit should be a matter of great concern," Ahluwalia said.

He also said that in the next three months the government should focus on removing impediments to project implementation.