In view of the national goal to reach a net reproduction rate of 1 by year 2000, there is a growing debate in India about the type of incentives and disincentives for promoting the practice of Family Planning. This paper reviews past experience with respect to incentives-disincentives in the Family Welfare Programme in India. It discusses issues in the implementation of incentives and the current debate on disincentives. Finally, policy issues for the future are presented. The studies revel that the impact on incentives on acceptance of FP is mixed. A higher level of incentive leads to improved performance, but couples are not solely motivated by incentives. Incentives do not seem to have seriously affected quality of acceptance. The implementation of incentives raises questions in respect of quality of services, method-mix of acceptance, implementability of deferred incentives, and effects of motivator incentives. Disincentives pose many legal and ethical issues infringement of basic rights of individuals, impact on quality of life of poor and consequences for the children. The paper argues that for a marked reduction in fertility, a congruence between national and family level benefit-cost relationship of family size is necessary. Any package of incentives-disincentives should, in the long run, help to reduce this lack of congruence. Such a package would, therefore, have to be selective and differ for different segments.