The accused, a native of Chasakhanda village, suspected her spouse had developed an extra-marital relationship with her sister-in-law and she hatched the plan to kill the woman's infant, they said.
The accused, Sashmita Moharana, allegedly strangled the baby and later dumped the body in a water container to ensure that the victim did not survive, the official said.
The accused booked under sections 302 (murder), 201 (destruction of evidence) and 506 (criminal intimidation) has been remanded to jail custody after a local court rejected her bail application on Thursday, police said.
Following the compliant, the body was exhumed in presence of executive magistrate and sent for post mortem.
The accused persons, named in the FIR, were detained and were questioned. Murder was also corroborated on the basis of findings in the postmortem report. The baby was strangled leading to the death, police said.
During interrogation, the accused spilled the beans and confessed to the crime, said the police. Police suspect that property dispute and past enmity between her and the mother of the infant led to the murder, the official said.
She was arrested and sent to jail on Thursday.
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