According to the World Bank, economic development refers to the ‘qualitative change and restructuring in a country’s economy in connection with technological and social progress’. This presentation identifies impact of drug addiction on the economic development of Punjab, a state in the north western part of India. Post-independence of India in 1947, Punjab has been one of the largest contributors of the National GDP. However, this has drastically changed since the last decade. 73.5% of the youth population of the state is addicted to drugs being imported from across the 553km border with Pakistan. 30% of the prisoners in the state’s jails are guilty of some or the other crime related to drug abuse. Addiction of illicit drugs knows no differences of caste, wealth and rural or urban area. The high prevalence of poverty, bad governance, corruption, illiteracy, unemployment and marginalization breed the sustainability of drug addiction. For example in the election campaign for the state assembly polls that were held in 2012, political parties filled in the pockets of chemists with lucrative sums of cash in order to sell dangerous prescription. This enabled them to secure their vote banks. To make matters worse the de addiction centers are like sweat shops busy minting money. They have cases of addicts being subjected to the treatment of anger management by being tied and beaten. The production, trade and consumption of illicit drugs lead to losses in health and productivity and rise in criminal activities thus hindering the process of economic development.