New Delhi, Feb 22 (IANS) With inflationary pressures mounting and prices of some essential commodities skyrocketing, Prime Minister Manmohan Singh has asked all state chief ministers to take suitable steps and come down heavily on hoarders.

His letter was dispatched even as the Cabinet Committee on Prices met Thursday to review the situation and discussed the steps that can be taken by a special cell in the cabinet secretariat to keep a daily watch on prices.

The moves also came amid opposition parties gearing up to attack the government on prices when the parliament's budget session begins Friday, since the annual rate of inflation based on wholesale prices has jumped to 6.73 percent in the recent weeks from 3.98 percent a year ago.

"The prime minister has advised state governments to put in place an appropriate mechanism for regular, intensive monitoring of commodity prices in order to take prompt and necessary action to curb price rise," an official statement said.

"The prime minister has written to all the chief ministers, apprising them of measures taken, and underlining the role of the state governments in keeping a check on prices of essential commodities," the statement added.

"The needs of below poverty line families have to be met, and if they are able to get their requirements under PDS (public distribution system) with ease, it would provide immense relief to them," the prime minister's letter said.

"The impact of rise in prices on the low and middle income groups, who have to spend a large portion of their income on essential purchases, is a major cause of worry for us," the letter added.

Earlier, the cabinet meeting chaired by Manmohan Singh reviewed the prevailing inflationary expectations, the supply side constraints and the measures taken thus far to control the skyrocketing prices of various essential commodities.

"We found that supplies of sugar as also of potatoes have improved, while some other essential commodities is still facing supply crunch," Finance Minister P. Chidambaram told a press conference after the cabinet meeting.

The finance minister did not spell out the commodities that the government found lagging in supplies, but said several steps had been taken on that front and that the government would not hesitate in taking more such measures in the future.

"We will take every step possible to tame inflation. The present spurt is due to a demand-supply mismatch and rise in prices of some commodities in international markets," he added.