Describing terrorism as a "national epidemic" at a news conference here, he said it should be rooted out from the country.
POTA was withdrawn because of its many loopholes, he said. His comments come in the wake of the serial bomb blasts at Jaipur in which at least 64 people were killed.
He said he would soon submit the Administrative Reforms Report to Prime Minister Manmohan Singh.
Moily said the "misrule of BJP-JDS has resulted in anti-incumbency which is a plus point for the Congress" in the Karnataka assembly elections.