The Ahmedabad Municipal Corporation has decided to give residents one rupee per visit to their public toilet facilities.
This was done in a bid to draw them into its 300 public toilets and away from open areas and public walls, which often reek of urine.
AMC health officer Bhavikk Joshi said the offer would be trialed at 67 public facilities across Ahmedabad, in western Gujarat, where officers will give a rupee to every user.
"Once successful the project will be implemented in all the 300 public toilets in Ahmedabad," Joshi told AFP on Monday.
The move is the latest effort to motivate people to use toilets after the central government had announced the 'Swachh Bharat' drive last year championed by Prime Minister Narendra Modi.
AMC standing committee chairman Pravin Patel said repeat offenders would be "identified and encouraged" to use the coin-paying toilets.
"The idea behind this project is to prevent open defecation in parts of the city where people, despite having public toilets, defecate in the open," Patel told AFP.
The central government last year had announced a scheme to check whether people who were given toilets as part of its cleanliness drive were actually using them, by getting sanitary inspectors to go door-to-door.
UNICEF estimates that almost 594 million people - or nearly half of India's population - defecate in the open, with the situation worst in poverty ridden rural areas.