The persistent rise in public debt has emerged as a critical fiscal challenge for several Indian states, with Punjab representing one of the most fiscally stressed economies. Despite its historically strong agricultural base and significant contribution to India’s food security, Punjab has experienced mounting debt levels driven by structural economic constraints, populist fiscal policies, low revenue mobilisation, and escalating committed expenditures. This paper examines the dynamics of Punjab’s rising public debt by analysing fiscal consolidation measures, revenue mobilisation trends, expenditure rationalisation, economic growth linkages, debt restructuring initiatives, and institutional reforms over the period 2001–2025. Using secondary data from Punjab Budget documents, Reserve Bank of India reports, Finance Commission reports, and government audit records, the study evaluates the effectiveness of state-level policy responses in containing fiscal stress. The findings reveal that while expenditure compression and debt restructuring have provided short-term relief, they have not resolved the structural causes of indebtedness. Persistent revenue deficits, high interest burdens, and constrained fiscal flexibility continue to undermine long-term sustainability. The study concludes with policy recommendations emphasising economic diversification, strengthened revenue systems, institutional accountability, and political commitment to fiscal discipline to ensure sustainable public finances in Punjab.