Micro, Small, and Medium Enterprises (MSMEs) are the backbone of Karnataka’s economy, contributing significantly to employment generation and income enhancement, especially in rural and semi-urban regions. This article delves into the multifaceted impact of MSMEs on Karnataka’s economic growth, focusing on their role in creating jobs, boosting income, and fostering entrepreneurship. It also explores government initiatives such as the Karnataka Industrial Policy 2020-2025 and highlights the challenges faced by the MSME sector, including access to credit, skill gaps, and technological limitations. The article concludes by emphasizing the need for continued policy support to further unlock the sector's potential and promote inclusive economic growth.