Water resources are epitome of Punjab. But, the mismanagement of water resources is making Punjab – a water deficit state. Increasing urbanisation, industralisation and agriculture is exerting pressure on water resources of Punjab. Punjab is an agrarian state, depends entirely on its land and water resources for the socio-economic development. Agriculture is the driving force of the economy of Punjab. However, due to extreme exploitation and misuse of resources to develop agriculture, through high yielding varieties of seeds, chemical fertilizers and a significant amount of water is bringing Punjab’s economy at plateau stage. Punjab which was a model state for the country, entered into the disaster zone. Therefore, the present research focuses on essential factors like urbanisation, agriculture, irrigation, chemical fertilizers and political opportunism which has affected water resources of Punjab.