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Indebtedness is increasing day by day in rural areas of Bathinda district. Poverty is perhaps a major cause for this rural indebtedness. The low level of rural incomes, the uncertain and primitive Farming of small landholdings makes it impossible to meet the needs required for their livings of rural households. Often, the rural people take debts to meet these needs. This problem is just not related to one individual but is passed on from one generation to next generation. Taking debt for the purpose of agriculture production is indeed necessary as it contributes to production. However, the rural people incur debts for non-productive purposes also. Thus, it becomes impossible to repay these loans due to low output of agriculture. To clear these loans, the rural people incur debts again. In this way, they are stuck in the clutches of indebtedness.