The government think tank also proposed using mobile methanol generation plants for producing the gas from stubble.
The issues related to landfill sites in Delhi and stubble burning also figured in the Rajya Sabha today.
Stubble burning by farmers in Punjab and Haryana recently became a serious issue as it added to air pollution in northern part of the country, including the national capital region (NCR).
"We have got landfills in all cities. Using technology of gasification, we can make methanol. We will soon approach Delhi government (in this regard)," Niti Aayog member V K Saraswat told reporters here.
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"We want to do this as major exercise," he said.
Saraswat, former Defence Research and Development Organisation (DRDO) chief, said that the methanol economy promises to help India mitigate its petroleum import costs and at the same time counter problems associated with global warming.
Niti Aayog is government's premier think-tank, with the Prime Minister as its chairman.
Raising the issue of municipal solid waste in the Rajya Sabha, veteran Congress T Subbarami Reddy demanded that Delhi Development Authority (DDA) should immediately allot land for alternative landfill sites for dumping the municipal waste generated in the National Capital.
Congress leader Pratap Singh Bajwa had raised the issue of burning of crop residue and sought a permanent solution to the issue.
He sought immediate sanction of funds by the Centre to solve the problem.
He said NITI Aayog has projected that a permanent solution would cost around Rs 11,000 crore.
Farmers, he said, needed support and should be given Rs 200 per quintal extra to get rid of crop residue in eco- friendly way. Farmers should be given financial support to stop stubble burning.