However, the shoe fell a few metres away from the dais.
It was thrown as the Chief Minister stood up to address the gathering.
The youth, identified as Vikram (23), is a resident of Dhanoula in Barnala, Khanna SSP Harsh Bansal said, adding that he also raised slogans against the Chief Minister before hurling the footwear.
He has been taken into custody and is being interrogated, the SSP said.
Commenting on the episode, Badal said he had "forgiven" the youth.
Vikram, however, claimed that he did not hurl the show towards the Chief Minister, but towards his chair on the dias.
"I am angry with all the politicians...they promise employment, but on ground do nothing," the youth said, adding that he was against politicians as "they make false promises".
Political conferences are held at Issru every year on the occasion of martyrdom day of Karnail Singh.
Congress Deputy Leader in Lok Sabha Amarinder Singh strongly condemned the incident, saying no one should be allowed to hurt the dignity of the Chief Minister for any reason.
In a statement issued here, Singh said, "I strongly condemn this incident".
He said whatever may be the reasons or whatever may be the political differences, nobody should be allowed to try to hurt the dignity of the Chief Minister or for that matter anybody else.
The former Chief Minister said this trend of trying to throw shoes at dignitaries must be dealt with firmly according to the law.
"This is no form of protest, but an attempt at cheap publicity by those who try to do it", he said, adding that the trend must be firmly curbed.
Punjab Congress President Partap Singh Bajwa also condemned the hurling of shoes towards Punjab Chief Minister Parkash Singh Badal, saying that the act is totally against the culture of this 'land of gurus'.
"This is an incident which should be condemned by all as it is not part of political culture of this state," he said.
However, he also used the incident to attack the Badal government, saying it cannot be taken in isolation as it manifests the latent anger of the people against this government which had been selling dreams but failing to keep its promises.
"You can befool some people for some time but cannot mislead them all the time. This is the result of frustration against the functioning of Badal's government and sooner he realised it, better it will be," Bajwa said.