Inequality in land ownerships leads to an uncertain relationship among agriculture growth, level of poverty and income inequality in the economy. The increasing population and decreasing share of crop income in total household income compels the households to concentrate on other diversified sub-sectors. Livestock is the most vibrant segment of agriculture sector which can be helpful for improving the situation. The need of time is to estimate share of livestock income in total household’s income, decomposition of livestock income into various components and to identify the relationship among different sources of livestock income, poverty and income inequality. This analysis can facilitate policy formulation. Moreover, conducting this analysis for different farm sizes and poverty bands in different agro-climatic zones can lead too much better understanding of role of various sources of livestock income in reducing poverty and income inequality.