The 93-year-old actor, who was in hospital recently due to ill health, retired from acting after an illustrious six-decade-long career that saw him performing in over 400 films.
The award, named after the father of Indian cinema Dada Saheb Phalke, will be conferred on Pran on May 3. This year also marks the 100 years of Indian cinema.
Welcoming the announcement, his son Sunil Sikand told PTI that the family was happy that Pran was recognised for his contribution to Indian cinema.
When asked whether the recognition came too late for the veteran actor whose name figured in the past also, Sunil said, "I don't want to get into these details. We are happy with the award. My father is watching the news on TV right now."
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The film industry, however, feels that the honour came too late for Pran.
"... Why so late recognition? He should have been given this years back. I am delighted for Pran sahab. We grew up seeing him as a villain but he was a hero," said actor Rishi Kapoor, who worked with Pran in films such as 'Karz', 'Naseeb' and 'Bobby'.
"He is the most deserving case. He should have been awarded much earlier. But it is never too late. He has been a source of inspiration for many people and stayed in the profession for such a long time," he said.