South Asia’s increasing debt is a significant contributor to the growing global debt burden and consequently a limiting force for global prosperity. When global public debt reached $97 trillion in 2023, a 3.66% share, i.e., $3.56 trillion, is accounted by the South Asian countries. This chapter aims at analysing the pattern of debt -GDP ratio along with the impact of selected macro-fiscal variables on GDP growth between 1990-2023 for eight South Asian Countries. The short and long term impact of debt distress is estimated through the Panel ARDL approach. The panel estimations reveal a non-linear and negative relationship between economic growth and public debt levels in the long run, though the short run relationship remains positive confirming the short run demand side impact. Moreover, government expenditure as well as fiscal deficits have a positive impact on long run economic growth whereas tax revenue and capital formation have insignificant relationship with economic growth. Contracting fiscal space, political crises, natural catastrophes, and most recently, the post-COVID-19 economic crisis are some of the demand side causes of exponential debt growth in South Asia. The growing debt burden is counterproductive for Agenda 2030 and medium-term economic growth, because of its heterogeneous effect. It is important to note that fiscal consolidation policy in South Asia appears to be overburdened with expenditure contraction than revenue mobilization maintaining the debt distress. Despite the post-COVID reduction in the debt-GDP ratio, it should be considered as a distress situation as the economic growth is yet to reach the pre-COVID levels.