The Congress leader said all sections including craftsmen, taxi drivers, hoteliers, houseboat owners, small merchants and farmers have been 'badly hit' due to restrictions.
Nadda asserted that the special status to the troubled state was temporary and transitional.
The Congress leader further claimed that people were afraid of the state administration.
Asked about the detention of political leaders and curbs on political activities he said there is no mark of freedom of speech in Jammu and Kashmir.
Azad, who was scheduled to meet people at Dak Bungalow which has been declared a jail, had to change the venue after authorities refused him permission, a local Congress leader said.
Earlier, Azad's three bids to reach Srinagar had failed as he had been turned back from the airport.
The leaders are learnt to have discussed the current political situation, including Kashmir, upcoming elections and the economic situation in the country, during the half-hour meeting.
The Supreme Court on Monday allowed Azad to visit four districts -- Srinagar, Jammu, Baramulla, Anantnag -- to meet people but said he cannot hold any political rally.
A bench headed by Chief Justice Ranjan Gogoi said the former Jammu and Kashmir chief minister can visit four districts -- Srinagar, Jammu, Baramulla, Anantnag -- to meet people.
Azad has also sought permission to check on social conditions in the state after the clampdown imposed by the authorities in the aftermath of the revocation of provisions of Article 370.
Congress leaders Deepa Dasmunsi and Devender Yadav have also been made members of the panel.
Few leaders from North Karnataka have also blamed the Congress for choosing leaders only from southern parts of the state.
If situation is normal, why political leaders are under house arrest?: Azad questions claims of normalcy in J-K
Azad is a part of the Opposition delegation visiting scheduled to visit Srinagar in Jammu and Kashmir later in the day in order to see the ground reality.
Among those participating in the demonstration was the CPI (M), CPI, Trinamool Congress, Samajwadi Party and the IUML.
The leader of Opposition in the Rajya Sabha was not allowed to go home or attend the party meeting at state Congress headquarters either, Azad's close aides said.