The objective of this research is to provide estimates of income poverty at the district level with the help of information available in household surveys; PSLM and HIES 2004-05. Both surveys are combined to produce poverty measures at district level using small area estimation technique. The technique uses the welfare (consumption or income) function to estimate and predict poverty with the help of non-monetary poverty correlates. This study estimates consumption functions separately for urban and rural areas and the coefficients of the estimated functions are applied to predict poverty incidence for provinces and for districts.