Nanodiamonds (NDs) were prepared by utilizing a microplasma facility. Ethanol and Argon mixture was decomposed in microplasma for the formation of NDs. In order to stabilize the NDs growth, the Hydrogen was added in the mixture during the growth process. Hydrogen flow rate was changed from 1 to 5 L/min to find out the optimum flow rate for the growth of stabilized NDs. The experiments were also performed without the introduction of Hydrogen for the comparison. TEM and Raman analysis confirm that the highest quality diamonds are obtained at Hydrogen flow rate of 3L/min. In the case of Hydrogen, the SAED patterns reveal the presence of pure diamond phases which in turn envisages the etching of graphitic shell. TEM micrographs reveal that the size of NDs produced at 3 L/min Hydrogen flow rate ranges from 1~20 nm which is much smaller than that of without Hydrogen (4-32 nm). EDX spectra also disclose the Carbon peak with a maximum intensity for 3 L/min flow rate. UV-Visible and PL spectroscopy analysis indicate the presence of Nitrogen-Hydrogen defect centers. However, a decrease in defect density at 3L/min indicates the production of improved quality NDs. FTIR also verifies the removal of graphitic shell around NDs at 3 L/min flow rate. Moreover, high hydrogen flow rates effectively incorporate nitrogen vacancy (NV) defects. Prepared NDs offer emerging applications in optoelectronic systems, biomedical nanodevices and nanoscale sensors for electric field, magnetic field & temperature.