Mumbai, Sep 12 (IANS): Billing it as the second biggest reforms initiative, union Corporate Affairs Minister Veerappa Moily said here Monday that the proposed New Competition Policy -- aimed at bringing transparency in all government and public sector transactions -- would be in place by next year.

"I expect to obtain the union cabinet's nod by December and the New Competition Policy should be in place by 2012," Moily said. "Ideally, policy should precede the law, but it is a good idea to have a policy, even if the Competition Act is already in force."

Moily was chairing the first consultation meeting -- organised here jointly by the Indian Merchants' Chamber and the Indian Institute of Corporate Affairs -- on the proposed policy.

The Competition Law is for enforcement, he explained, while the policy is for infusion of principles and promoting the culture of competition in the country.

Moily pointed out that his ministry wanted to strengthen and refine India's competition laws and the strategy involved drafting a competition policy, making changes to laws and norms that government departments needed to follow.

Once in place, the policy will be a guide for various ministries and state governments to follow on competition, he said.

The minister said it was not enough for the central government alone to implement the policy. State governments and local bodies also needed to be encouraged to promote competition. "It is their actions which affect the common man most," Moily said.

Moily observed that the proposed policy would be central to ensuring transparency in transactions.

Referring to the procurement policy to follow, Moily said that once it was in place, it would remove lot of arbitrariness in government purchases.

"Over Rs.11 lakh crore of purchases are effected by government departments in India," he said. "Sadly, we do not have a procurement policy yet, while smaller economies like Nepal and Afghanistan have well laid out norms."

The ministry wants to evolve a policy, based on a vast consultative process, for which it posted last month on its website a draft policy seeking public comments. Meetings with economists, consumer associations and businesses and industry have also been held.

A dozen experts are being approached to suggest sector-specific policy changes required to adopt the principles of competition.

The next national consultation on the competition policy is scheduled to be held in New Delhi Sep 22, following which the final draft will be prepared, he said.