The adoption of high yielding variety seeds, increased in use of chemical fertilizers and irrigation has helped in raising the income level of the farmers and total foodgrain production. But it cannot be denied that the adoption of this modern technology is expensive and it takes place at the cost of unsustainable use of resources. Groundwater depletion is found to be one of the major problems in Central Punjab. Among all districts, stage of groundwater development is the highest in Sangrur district, i.e. 264 per cent. All the nine blocks of Sangrur district are over- exploited and groundwater usage is highest in Sunam block. Therefore, in the present study entitled "An Economic Analysis of Groundwater Depletion in Sangrur District of Punjab ",an attempt has been made to examine the economic analysis of ground water depletion. As many as 120 small, medium and large farmers formed the sample of the study. The sample is taken from the two villages, viz. Tolawal and Rattangarh of the Sunam block (former having pre-dominantly tubewell irrigated farms and the latter having canal+ tubewell irrigation facilities). The study reveals that with an increase in area under wheat- paddy crop has also increased the area under groundwater irrigation. In Punjab, area under wheat crop has increased from 274 thousand hectare to 287 thousand hectare and for paddy crop has increased from 11 thousand hectare to 274 thousand hectare, from 1970- 71 to 2011-12. The study brought out that higher the farm size, higher is the ownership of motors and depth of motors and vice- versa. The technical efficiency on farms estimated through Data Envelopment Analysis (DEA), has indicated the mean technical efficiency of 90.3 per cent and 95 per cent in paddy production and 89.4 per cent and 94.9 per cent in wheat production, in tubewell irrigated and v canal+ tubewell irrigated farms, respectively. The multiple (step- up) regression analysis has revealed that land ownership, number of submersible motors and its depth had positive significant impact on farm income. The study suggests that the government should ensure minimum support prices for less water consuming crops. This will not only shift the existing cropping pattern but will also provide solution to over exploitation of groundwater. It also suggests that assured electricity may be provided to agriculture sector at subsidized rates to minimize this problem. Further, the government should take care for maintenance of canals on priority basis.