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The UK government may take the "nuclear option" of creating an independent regulator if the England and Wales Cricket Board (ECB) does not "put its house in order" over racism, says sports minister Nigel Huddleston.
Huddleston said Rafiq's testimony was "alarming and "harrowing", adding he believes Yorkshire is an "institutionally racist" club.
"What we all want is for cricket to get its house in order and get its act together and sort this problem out," he said.
"Problems in the past have not been adequately acted upon and the speed Yorkshire responded to Rafiq's concerns was extraordinarily slow, so it raises questions how seriously sport takes the issues raised.
"I've had assurances from [ECB chief executive] Tom Harrison he will do whatever it takes to correct the wrongs. He is frustrated."
On Tuesday, Harrison told the select committee that English cricket is approaching an "emergency" over its failure to address racism, adding the ECB had "struggled" to get the first-class game to "wake up".
Huddleston said that the government would "intervene" if not happy with the action being taken.
"Cricket in the UK is not nationalised, we don't have direct control [over the sport]," he added. "But if they don't get their act together, then we have the nuclear option of legislating in order to bring in potentially an independent regulator.
"That is probably the route that, if we absolutely had to, we could go down."
Rafiq first spoke out last year, claiming "institutional racism" at Yorkshire left him close to taking his own life.
Seven of the 43 allegations were upheld by an independent panel in October and the report found he had been a victim of "racial harassment and bullying" at the club.
However, Yorkshire said it would not take disciplinary action against any player, employee or executive.
Yorkshire's chairman Roger Hutton and chief executive Mark Arthur have subsequently resigned, with Hutton's replacement as chairman, Lord Patel, apologising "unreservedly" and settling the employment tribunal with Rafiq.
The ECB has suspended Yorkshire from hosting international matches, with the club also losing kit supplier Nike as well as several sponsors.