Land and water are the natural partners in the process of agricultural development. Their coordinated use is essen tial for long-term optimization of economic as well as social welfare. Deliberately planned or policy induced divergence from integrated land and water use management may bring short-term rewards but normally squeezes the long-term sustainability of growth as well as of resources. The Indian Punjab, known as the Heartland of Green Revolution, is a classic example of this. Punjab has depleted its land and water resources due to lack of their integrated use. The production pattern followed was neither commensurate with soil capabilities nor with water availability not to talk about their integrated capacities. The production, inputs use, pricing, marketing and other policies never focused upon the integrated sustainable land and water use management. The concentration of price support policy, assured marketing, input subsidization etc. on rice and wheat established the mono culture of high water requiring and nutrient exhausting rice-wheat crop rotation. This paper attempts to review the policies responsible for this situation and suggests a reformulation of the policies promoting sustainable land and water use. The poster presentation of the paper has been divided into five sections including first introductory section. Second section provides the profile of agricultural economy of the state. Third section deals with the policies, which prohibited the coordinated use of land and water. Fourth section reviews the impact of these policies on soil degradation and water depletion. In the fifth section an attempt has been made to put forward the policies and other remedial measures to correct the situation.