New Delhi: Finance Minister Yashwant Sinha on March 16 said the economy was on road to recovery and the Budget proposals will boost demand and growth, but identified growing Non-Performing Assets (NPA) of banks, depleting food stock and high transaction cost as problem areas.

"There are signs of recovery in the Indian economy. There are signs of recovery in the global economy. The budget has made various provisions for spurring demand. We look forward to better days," Sinha said after the post-budget meeting with Reserve Bank of India board members here.

Voicing concern over growing NPAs in the banking sector, Sinha said, "although NPAs in percentage terms have come down, in absolute terms it has gone up".

The Finance Minister also said there was a need for building up additional food stock for ensuring food security in the economy.

Sinha also expressed concern over the high transaction costs, which was rendering Indian industry uncompetitive in the global scenario.

RBI board members have made various suggestions which would be considered and implemented, he said.

"Many members have also sent written suggestions so that we could act upon these in future," Sinha said referring to discussions on the implication of the Budget and its future direction to the economy.

"I had the opportunity to explain the circumstances under which the Budget was prepared. I am very much encouraged by the endorsement from the RBI board members about the Budget provisions and how it is in the interest of the Indian economy," he said.

PTI