Members of the community thronged temples in the city here and elsewhere in the valley to offer prayers. They decorated their homes and shops with colourful 'rangolis' and flowers and lit 'diyas'.
Many shopkeepers in the city were selling specially made sweets and crackers for the festival.
Security forces posted here also joined the civilian in celebrating the festival, celebrated to mark the return of Lord Rama to his kingdom, Ayodhya, after 14 years of exile.
Members of the Muslim community also joined their Hindu brothers in the celebrations at many places.