"This is an institution of direct and, largely, participatory democracy and its activation will enhance political participation, stimulate representation, broaden democracy and deepen sovereign rule by the people," he said.
He denied that the proposed referendums were a way of distracting public opinion from more controversial issues on the political agenda.
The draft bill will first be discussed by the cabinet, after which there will be an extensive public debate that will include the general public and political parties, stretching over the next two months before it is tabled in Parliament.
The minister clarified that the issue of how binding the result of a referendum will be has not yet been decided, with the ministry in favour of it having only an advisory character.
Kastanidis said that there were already provisions for holding referendums of two types in the Greek Constitution, one being on matters of critical national importance relating to foreign policy or defence and similar issues and the second taking the form of a complete bill. The draft bill presented on Monday contains measures activating these two options.
Among others, it defines basic terms in the Constitutional articles, such as what constitutes an crucial national issue, who is permitted to vote and where, the form of the ballots used in a referendum and other procedural issues.
It stipulates that the electorate's verdict on a given issue will be advisory and not binding, except in the case that a referendum is held on a complete bill, in which case the result is binding if at least 50 percent of the electorate turn out to vote. It also stipulates that the budget and financial management cannot be decided by referendum.
Kastanidis said that referendums initiated by private citizens were an "excellent political idea" and a future possibility but not something that could be implemented at present because this would require revision of the Constitution.
He estimated the cost of holding a referendum would be similar to that of holding European Parliament elections.