Punjab faces a significant debt crisis, with its debt reaching Rs 4 lakh crore and a debt-to-GSDP ratio of 46.6%, making it the second most indebted state. This financial strain is attributed to years of misgovernance, unproductive expenditure, and extensive subsidies, exacerbated by the current AAP government's adoption of a liberal subsidy model. The state's fiscal health is ranked low by NITI Aayog, despite upcoming elections prompting political activity.