He plans to put all local police units under federal control.
The students, all trainee teachers, went missing in September after joining a protest in Iguala, Guerrero state.
Their disappearance sparked mass protests, with many still unconvinced by the official explanation that the students were murdered by a drugs gang.
In a televised speech, President Pena Nieto said that "Mexico must change".
He announced proposals for a series of constitutional reforms that would allow the country's 1,800 municipal forces to be dissolved and taken over by state agencies.
The reforms would also enable Congress to dissolve local governments infiltrated by drug cartels.
The overhaul would begin in Mexico's four most violent states, he said - Tamaulipas, Jalisco, Michoacan and Guerrero.
Guerrero is where the 43 students vanished on 26 September.
They had been attacked by local police in Iguala after attending a labour rights demonstration.
Under President Pena Nieto's plans, the thousands of local police forces would come under the control of the 31 federal state governments, and the capital.
Corruption within the police force, especially the municipal police, is rife. Officers are often offered money or threatened by the country's powerful drugs gangs.
Key proposed reforms:
- Replace the country's 1,800 municipal police units with state-level forces
- Launch a single, nationwide phone number for emergencies
- Assign national identity numbers or documents to Mexicans
- Deploy more federal police to Guerrero, Michoacan, Jalisco and Tamaulipas
The proposals would also seek to simplify the way in which crimes are currently dealt with at a federal, state or local level.
Some local police forces refuse to deal with federal crimes such as drug trafficking.
The reforms are due to be presented to Congress next week.
President Pena Nieto had faced widespread criticism over the students' disappearance, despite vowing to track down those responsible.
Relatives of the missing have led mass protests across the country to express their anger at the government.
The official explanation offered by the Mexican authorities is that the students were murdered by a drugs gang.
The gang was said to be in collusion with the mayor of Iguala, Jose Luis Abarca, who has been arrested facing accusations that he ordered police to confront the students on the day of their disappearance.
Investigators said that municipal police officers confessed to seizing the students, and later handing them over to the gang.
However, the families of the students, and their supporters, say they are not convinced by the official version of events.
They say they will not believe the students are dead until it has been officially confirmed by Argentine forensic scientists working on the case.
Forensic tests are being carried out on bodies found in mass graves in Guerrero.
In recent years thousands of people have gone missing or been killed after being caught up in drug-related violence.
Several killings or suspected kidnappings have been reported in the past week:
On Thursday, police discovered 11 burned or decapitated bodies on a road near Chilapa, in Guerrero. The victims were said to be men in their 20s
Also on Thursday, authorities said they would investigate reports that 30 secondary school students were kidnapped in Cocula in July
The bodies of two missing farmers were found buried in the town of Mazatan, in Chiapas state, on Monday, Proceso magazine reported.
BBC News |