Shah on Saturday announced that as a result of significant improvement in the security situation, the draconian act will be in force in eight districts of Assam instead of nine from April 1, 2023.
Sarma said the North East is witnessing a Golden Era.
"As the on-ground security situation improves due to a host of pro-people policies- I express my profound gratitude to Adarniya PM @narendramodi ji for further reducing the disturbed areas in Assam, Manipur, and Nagaland", he said.
"This second reduction, in less than a year, is reflective that the governance model led by Hon PM @Narendramodi ji, rests on the twin pillars of decisiveness and responsiveness", Sarma tweeted.
Thanking Shah, Sarma said, "In his steadfastness, he has enthused decision-making with a solution-centric approach."
"A vibrant economy, sound security policy, and deepened societal harmony has resulted in two back-to-back mandates from the people of our region", he posted on the micro-blogging site.
Above all, the prime minister has "truly won the hearts of our people and diminished both the physical and mental distance which had once existed between North East and rest of Bharat", he said.
"We once again express our most sincere thanks for this historic decision", Sarma added.
In Manipur the Armed Forces (Special Powers) Act has been withdrawn from four more police stations on the same date, which meant 19 police stations in seven districts of the state have been removed from the disturbed area notification so far, officials there said.
The Act was in force in the entire state, except for the Imphal Municipality area, since 2004. But from April last year, it was withdrawn from 15 police station areas of six districts.
In Nagaland, the Disturbed Areas Notification was applicable in the entire state since 1995. On April 1, 2022, it was withdrawn from 15 police stations in seven districts. It will be further withdrawn from three other police stations of another district with effect from April 1, 2023.
Civil society groups and rights activists have been demanding the withdrawal of the alleged 'draconian' law from areas in NE states where it was imposed.