Policy
Policies are objectives that an organization or a government sets for itself to achieve in a given period of time, and laws are the tools that help a government achieve these objectives. For example, a government may have views in the sphere of health and education with certain objectives in mind. It formulates policies as guidelines or a framework to move forward in the desired direction and it is these principles outlined in policies that help a government to come up with proposed laws.
Policies describe the objectives and missions of a government and how it proposes to achieve these objectives using various methods and principles. A policy document should not be misconstrued as a law. However, new laws in various spheres of social life such as health, education, finance, etc reflect the intentions of the government. So you get to know the goals of a government reading its policy statement. Directives set out in a policy statement become laws only when the government is able to present and push through the draft bills in the houses of the parliament.
Law
Laws are the standard rules and regulations that are compulsory and to be followed by all the people of the country. Laws are set of principles that guide people’s actions in various situations of life. Laws are compulsory and there are provisions in these laws for punishment for those who break or do not follow these laws.
So, when a new government assumes power, it has a policy statement but it needs to convert these policies into laws before it can set out on its agenda. Laws help a government in setting up legal and institutional framework to further the aims spelt out in its policy statement.
Though it is mostly the executive that is in charge of making policies fro different spheres of economy and public life, even a private member can come up with a bill in the parliament that can take the shape of a law if it is debated and passed by the parliament.