@Vignesh Kumar R When Azure Policy starts a template deployment when evaluating deployIfNotExists policies or modifies a resource when evaluating modify policies, it does so using a managed identity that is associated with the policy assignment. Policy assignments use managed identities for Azure resource authorization. You can use either a system-assigned managed identity that is created by the policy service or a user-assigned identity provided by the user. The managed identity needs to be assigned the minimum role-based access control (RBAC) role(s) required to remediate resources.
Kindly make sure you have provided necessary permissions to the managed identity that is associated with the policy assignment. For more information, you can refer this document.