India needs both (and I totally agree with removing large security contingents where they aren't necessary, it's a waste of taxpayer money). But it's a fact that India's police is underarmed, undertrained, underpaid and understaffed. And as a result, they are also very lax when it comes to their jobs and following rules and procedures, as well as notoriously corrupt, which then results in the sort of bad reputation and scorn they receive from common citizens. I am waiting for a Government that shows the will and ability to tackle this gargantuan problem (my best bet is if BJP wins in most states and stays in power at the Center, they might be able to do something).
To the degree of having identification and a database for such information (sort of like the driver's license and voter registration system here in the US), sure I agree with that. I also agree with officially registering your new address with the Government when you relocate (although this is bound to run into unique, India-specific problems, such as the case of people who live in illegal slums). But that alone is not the solution.
India needs a comprehensive rehaul of its police force, and that will also go a long distance towards fixing a lot of problems (and think about it, a bigger police force also means more job openings).