This study uses a multi-index approach, including Normalized Difference Vegetation Index (NDVI), Vegetation Condition Index (VCI), Land Surface Temperature (LST), Temperature Condition Index (TCI), and Vegetation Health Index (VHI), to provide a spatiotemporal assessment of agricultural drought in Punjab and Haryana over two decades. The findings show considerable changes in vegetative health, with a notable decline in 2003 when the NDVI values ranged from −0.19 to 0.87 and 67.62% of the region experienced extreme or severe drought conditions. By 2013, improvements were being noticed, due to favorable rainfall patterns and good conservation practices, with the NDVI values rising to a range of −0.18 to 0.99 and severe drought zones falling to 18.75%. However, by 2023, vegetation health had deteriorated, with the NDVI values ranging from −0.19 to 0.89 and extreme and severe drought conditions resurging to 27.44%. The LST studies found persistently high temperatures, particularly in the southern regions, ranging from 24.99 °C to 44.13 °C in 2003, 22.45 °C to 41.07 °C in 2013, and 25.17 °C to 43.07 °C in 2023. Correlation analysis revealed that temperature extremes have a negative impact on vegetation health, with substantial negative correlations between VHI and TCI (−0.583) and LST (−0.459) in 2023, as well as a large positive connection (0.991) between the VCI and NDVI. These findings highlight the importance of ongoing monitoring, adaptive management measures, and effective conservation activities in order to offset the effects of climate variability, improve vegetation health, and assure sustainable agricultural practices in the region.