The tower, witness to various political events during the last two decades, was fitted with four new clocks.
The clocks were installed by the Lal Chowk Traders' Association - a body of nearly 600 shopkeepers and other business establishments.
During the 2008 Amarnath land row, the clocks fitted atop the tower were damaged by flag-hoisting protesters. The tower was the focal point of the 2010 summer protests also.
'Ghanta Ghar' hit the headlines again in January 2011 when BJP announced that it will hoist the national flag on it.
The clocks were inaugurated by Minister of State for Tourism Nasir Aslam Wani and the Traders' Association president Deen Mohammad Mattoo.
"This is a major attraction of the Lal Chowk, so we had decided to fit it with clocks," Mattoo said.
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He said the decision to fit new clocks to the tower was made in 2010, but the plan was shelved after Kashmir Valley was engulfed in protests that year.
Mattoo said the tower looked desolate without the clocks.
"That is why we took this initiative," he said.