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This paper empirically investigates the relationship between rural development and Urban transformation in Karnataka. Karnataka is a state of rich culture, heritage, following 30 districts, 28,848 villages, with this vast resources, manpower still we are developing state and hence rural development is our atmost focused platform. Rapid transformation of rural areas in Karnataka is the major emerging economies of State. Karnataka poses both challenges and opportunities to the sustainability of society. Though economical growth can happen but development of any state or country is effected due to prevailing poverty, unemployment and lack of technological and structural changes because of which inequalities continue to grow, MSME is the key to overcome employment issues, poverty reduction, and economic stability particularly in rural regions of the state, in context to rural development urbanization contributes to overall growth of state. The theme of this paper is emphasizing on the function of MSME which is important for progress and  competitive rural-urban transformation. Perspective study approaches various challenges and outcomes with different criteria of MSMEs.

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