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The present study was conducted in Pali district of western Rajasthan, which represents both arid and a semi-arid tract and purposively selected for the study. The study was based on primary data, which were collected from 72 bovine rearers from six villages, selected using stratified random sampling. The composition of bovine was found to be changing in favor of buffalo species with 1.93% growth rate during 1966 to 2007. Primary data on various costs and returns were collected during the year 2004 to 2007 using personal interview technique. On an average, a farmer invested around Rs 101512 on a bovine unit of 6.47 adult cattle unit (ACU) in study area. Bovine rearing was found profitable enterprise with net return of Rs. 108049 per year with average herd size of 6.47 ACU. The technical efficiency of cattle and buffalo at the average level of input use indicated a potential of increasing milk production and the returns by 30 and 25%, respectively by adopting better management practices without incurring additional expenditure.