The Micro, Small & Medium enterprises (MSMEs) is one of the most vital sectors of any economy in general and India in particular in ensuring equitable, inclusive & employment friendly economic growth. This sector also plays very important role in socio–economic development of Indian economy on account of their inherent advantages like low capital requirement, high employment generation, and decentralization of industrial activity, utilization of locally available resources and widening of entrepreneurial base. MSMEs has performed exceedingly well and enabled the country to achieve a wide measure of industrial growth and diversification over five decades. In this paper an attempt has been made to analyze the performance of the MSME sector and will touch upon, in brief, some of the various measures in recent times undertaken by Government of India and SIDBI to advance this vibrant and booming sector. The paper also discusses the present status of MSME sector and its performance. Secondary data has been analyzed to study the MSMEs sector and its performance in India. A number of literatures have reviewed to understand the major advantages and the challenges of MSMEs sector in Indian economy so far. The study analysis has found that MSMEs has exhibited a good performance in recent years. However at the same time its challenges are also not ignored. The role of MSMEs sector is growing rapidly and they have become a thrust area for future growth for rural and urban development and its economic upliftments have a lot of policy implication.