Error:virtual directory not being configured as an application in IIS.

My application was working fine. Then due to some reason , I un-installed IIS and re-installed again 
Now i get following error when i try to run it.

    " It is an error to use a section registered as allowDefinition='MachineToApplication' beyond application level.  This error can be caused by a virtual directory not being configured as an application in IIS.  "
But, I have configured it as virtual directory in IIS. So, where the error can be?
 
 web.config file
<?xml version="1.0"?>
<configuration xmlns="http://schemas.microsoft.com/.NetConfiguration/v2.0">
    <connectionStrings>
        <add name="test_connectionstring" connectionString="Data Source=.\SQLEXPRESS;AttachDbFilename=C:\Inetpub\wwwroot\test\App_Data\Database.mdf;Integrated Secu ...