A couple may have to pay tax if they have a third child in Orissa, the Second State Finance Commission set up by the state government has suggested.

The recommendation was for imposing a cess of Rs 60 a year for families above the poverty line and Rs 25 for families below the poverty line, its report said.

"Incentives have not worked. Disincentives are required to restrain the population growth rate, improve the per capita income and employment and check the spread of poverty," it said.

Gram panchayats should be empowered to impose the cess, the report said.

The commission's report, recently submitted to the government, said imposition of such a tax will help mobilize additional resources to improve the revenue base of local bodies while discouraging couples from having a third child.