Primary health center, urban health center and district hospital rely on Sahali method for hemoglobin estimation. Sahali acid hematin method is still in vogue used, in spite of availability of more reliable and accurate methods. Sahali acid hematein method though effective and easy is not sufficiently accurate because it shows wide scatter in inter observers and intra observer result distribution. For good ethical laboratory practices it needed to develop the variability accuracy precision of hemoglobin estimation by Sahali acid hematin method compared to Drabkin cyanmethemoglobin method as per guidelines by ICMR. Hence the present study was undertaken for standardizing the hemoglobin result in district hospital laboratory. Objectives: Observe the inter-observational result variation using the Sahali method of Hemoglobin estimation and to validate the accuracy and precision of hemoglobin estimation by Sahali method as compared to Drabkin method. Material and Methods: This is a prospective hospital based study. 51 subjects from OPD were included in the study and duration of the study was 2 months. Sample for hemoglobin estimation was collected from the subjects in 3 different bottles and divided into group A, B and C according to the method of estimation. Results: Sahli's method of estimation in the samples by two different groups of workers showed a significant difference. Comparison of haemoglobin estimated by Sahli's and Drabkin method by finger prick and venepuncture method of collection not showed a significant difference.