Defender Varun Kumar was not part of the original 16-member squad selected for the Tokyo Olympics but was called up later when the IOC decided to allow "alternate athletes" in team events.
Chief Minister Jai Ram Thakur announced the cash award in the state Assembly for Varun Kumar, a resident of Dalhousie in Chamba district.
India need to plug holes in defence against Germany to secure first Olympic hockey medal in 41 years
World no.3 India played into the hands of world champions Belgium with their defence succumbing under relentless pressure from the Red Lions to concede a bulk of penalty corners.
Experienced drag-flick specialist Rupinder Pal Singh as well as Varun Kumar, who had missed out the previous tour owing to rehab, are also back in the mix.