Dept perpetuates economic inequalities. The colonial administrator took it as a corollary of prosperity which could be in the case of landlords and surplus producing peasants. A considerably higher proportion of those households in dept sere tenants and marginal farmers, a fact, the colonial administrator underestimated. Moreover, the Punjab Committee on Indebtedness (1934) referred land revenue as one of the main causes of indebtedness in the Punjab. The British Punjab contained only seven percent of the population of India and her share of debt exceeded sixteen percent of the total, thus, making the Punjab ’a heavily indebted’ province. The problems of Punjab peasantry of credit at lower interest rates, rural indebtedness, litigation and alienation of land from producers to non-producers. The main objective of the colonial state was to perpetuate imperial hold and further the process of extraction and exploitation.