Despite many policy measures taken by the central and state governments, the indebtedness of farmers, especially marginal and small cultivators, keeps increasing. Some recent studies on agrarian distress show the significant role of healthcare expenditure in increasing indebtedness. This article presents the result of a study conducted in selected villages of Amritsar and Gurdaspur districts of Punjab in 2008-09 to estimate the level of credit taken for healthcare purposes by marginal and small farmers. It also analyses the present scenario of public health services in rural Punjab.