Punjab peasantry is in the clutches of severe indebtedness. To overcome the problem of debt trap, effective measures should be taken by the government, social organisations and farming community. The government should exercise a strong check on the activities on non-institutional credit agencies and provide institutional credit facilities to the farming community at low rates of interest with easy repayment facilities. The co-operative sector should be developed/strengthened in the state. The sale of agricultural chemicals, fertilisers and quality seeds should be promoted through village level primary agricultural co-operative societies.