The biggest challenge that we face in the country today is to reform the public management systems. Reform of public services has not been high on the agenda of government. Public administration is a value driven activity with deep moral groundings. One of the main reasons for poor performance of public services is lack of accountability. A government servant's promotion, career advancement and continuance in service should be linked to his actual performance on the job and the dead wood should be weeded out. In order to provide cost-effective efficient services there is need to downsize government, improve work environment and privatise some of the services. There is need to create a lean, thin and efficient government machinery by modernising the procedures and work methodology and abolishing the babu culture in government offices. The basic reason why bureaucratic and political leadership is unable to reform and bring much needed change is lack of ethical compass.