2-(3,4 epoxycyclohexyl)ethyltrimethoxysilane (EETMS)/3-glycidoxypropyltrimethoxysilane (GPTMS) mediated, in situ synthesis of functional palladium (Pd) nanocomposites over the graphene oxide (GO) surface is reported. The prepared nanocomposites viz, Pd/EETMS, Pd/GPTMS, Pd/GO/EETMS, and Pd/GO/GPTMS, are encapsulated into mesoporous (2–10 nm) silica-alginate beads to primarily serve the development of cost-effective catalyst for on-board generation of hydrogen. Major findings involve: (i) the synthesis of porous silica alginate beads, with the controlled pore sizes (2–10 nm) as a function of concentration of alkoxysilanes, (ii) onboard release of hydrogen from the decomposition of hydrazine, which is evaluated as: (1) time-dependent disappearance of the N–N bond stretching band at 1069 cm−1 based on the FTIR spectroscopy, (2) volumetric estimation of the equimolar hydrogen using methylene blue (MB); (3) catalytic reduction of p-nitroaniline (PNA). The decomposition of high concentration of hydrazine is made possible using very low concentration of palladium. On calcination the efficiency of catalysts found to enhance further. The noteworthy finding is probing the hydrogen evolution using FTIR spectroscopy. Hydrogen selectivity of ∼100% is obtained from the most efficient catalyst (Pd/GO/EETMS-623 K).