Personal details such as declared nationality and marital status will also be recorded, as well as statistics on the proportion of bank account holders, mobile phone owners and internet users.
"The census is a means of evaluating whether government programmes are reaching their intended target, and to plan for the future," said C Chandramouli, the census commissioner.
"The trick is to get things right the first time. There is no question of a re-census."
The first person counted on Thursday was Pratibha Patil, the Indian president, at the official residence, in the first leg of a process called "houselisting".
Houselisting entails recording information on homes, such as the construction material used to build it and the availability of electricity and water.
The physical count of residents will then be made in February next year and the completed census will be released by mid-2011.
Officials will be armed with satellite maps in order to reduce the 2.3 per cent margin of error recorded in the last census, which was conducted in 2001.
A total of 1,028,737,436 people were counted in that census and official 2009 figures calculated an increase of about 130 million.
S Parasuraman, a demography professor in Mumbai, said the new population registry would provide a valuable database.
"In a disaster for instance, one will be able to pinpoint how many people were living at a place before and after the catastrophe struck," he said.
"It will be a compilation of useful information enabling proper governance."
The exercise has many challenges, including coverage of a vast geographical area, widespread illiteracy and diverse cultures and languages.
"I have instructed enumerators to ensure they reach out to the women, the elderly, the disabled, nomadic communities and migrants," said Chandramouli.
"Everyone must participate and make it successful. This is for the good of the nation and its population."