"We are planning to ask Jammu and Kashmir government for judicious use of Jammu and Kashmir Public Safety Act 1978," a Home Ministry official said.
The release of Alam, who had spearheaded the campaign of stone-pelting in the Valley in 2010 and was detained under PSA, from custody a few days ago had triggered a row.
BJP, which shares power with PDP in Jammu and Kashmir, had come under attack over Alam's release.
The interlocutors in their report while recommending amendment of PSA said that during their meetings, most of the Kashmiri delegations criticised the Act saying it had sweeping powers which make it open to misuse and authorities should stop indiscriminate use of PSA.
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"While its use has been considerably reduced now, the Act's sweeping powers make it open to misuse and should be amended accordingly," the report said.
The main problems with PSA are under Chapter IV (Power to make orders detaining certain persons), Section 8 (Detention of certain persons), it said.