Answer: Krishna never punishes anyone.
But out of foolishness, the living entity places himself in trouble, by neglecting the loving guidelines and warnings that the Lord is constantly giving us.
Even in the mundane world, a loving father or teacher – whose love is merely a glimmer of a fraction of Krishna’s love – will not have the heart to punish an erring child.
Yet, when the child does not learn his lesson, a caring teacher will give tests and give consequences for the child’s right/wrong actions – even if it may appear painful for the child – because through this the child will eventually learn.
Similarly if a child is uncontrollable and refuses to be disciplined by love, a loving father may reluctantly place the child under some stern authority, only for the benefit and education of the child.
Even if this is done by loving parents, it is not with a view to punish, but to relieve the child of that which will bring them even greater unhappiness than the immediate restrictions do.
Srila Prabhupada explains that the all-affectionate Almighty Father similarly places the rebellious conditioned soul under the control of Mayadevi.
In maya’s domain, the living entity experiences just consequences of his own misdeeds, the laws of nature are very stringent and it is not possible to escape them after having done misdeeds.
But if we learn our lesson, and once again lovingly turn our face to Krishna, and willingly abide by His instructions, we are immediately delivered from the clutches of this severe correction agency of Mayadevi. (See SB 1.7.5)
In essence, There is a world of difference between loving discipline and harsh punishment.
Indeed, God is all-merciful, even when He extends loving discipline.