The decision was taken during the HI Executive Board meeting here today.
The grant will be used to organise senior, junior, sub-junior level tournaments and also school level tournament that will help in attracting more youngsters towards the national game.
"Though as a game hockey is popular in the country, this grant will help encourage more youngsters to come and play the game, which will popularise the game at grass-root level," said HI Secretary General Narinder Batra.
In the meeting today, it was also decided to give financial support to a pool of 33 junior men and 33 junior women players.
HI will give each player Rs 1,20,000 per annum, which is equal to Rs 10,000 per month payable at every quarter, this shortlisting from 48 to 33 will be done in early June 2012 and payments will start from July-September quarter.
The decision regarding annual retainership fee for senior men and women players will also be taken shortly and the board has authorised Batra to finalise the same.
This is the first time in the history of Indian hockey that HI will give grant to its State Associations, since the commencement of men and women hockey from 1927 onwards.
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