Part of the weekly Sunday collection at church was being set aside to fund the pledge.
Some Catholic churches are even offering free treatment at their hospitals to large Christian families.
"Our campaign is for responsible parenthood, but the decision on how many children a couple should have is personal. We are not against family planning," said Father Paul Thelakkat, a spokesman for the Catholic Syro-Malabar Church which is advocating the policy of rewarding procreation.
But the church's cash-for-babies scheme was announced shortly after the provincial government-appointed committee on the rights and welfare of women and children suggested action against parents with more than two children.
Headed by retired Supreme Court judge VR Krishna Iyer, the 12-member committee recommended that couples with more than two children should be fined 10,000 rupees or serve a three-month jail term.
Christian and Muslim groups condemned the report, saying it encroached upon their religious freedom.
But the leader of Kerala's Hindu United Front said the two-child norm advocated by the federal Family Welfare Ministry should be strictly enforced as there were limited resources available to sustain the country's enormous and growing population.
Between 1991 and 2001, Kerala's Hindus and Christians have declined by 1.48 and 0.32 per cent respectively of the state's population of 31.8 million while Muslim numbers have increased by 1.7 per cent.
India's population has reached 1.21 billion, according to the latest census which was completed in March. The United Nations estimates India's population could overtake China's 1.34 billion people by 2030, posing a challenge to the country's economic, environmental and social planners.
It has more people than Bangladesh, Brazil, Indonesia, Pakistan and the United States put together and economic planners said cash or other incentives for additional babies would be unwelcome.
On the other hand, India's 17 million Christians, who constitute about 2.5 per cent of the country's population, feel under siege following periodic violence against them by the Hindu majority.
This anti-Christian violence surfaced under the six-year rule of the Hindu nationalist Bharatiya Janata Party-led federal coalition that ended in 2004 when mobs burnt churches and attacked missionaries and nuns as well as Christian schools, hospitals and charitable organisations.
At the time, Hindu extremist leaders justified their anti-Christian campaign on the grounds that missionaries deserved "punishing" for starting a drive to convert lower caste Hindus to Christianity, a charge denied by church leaders.
