This paper presents a generic design methodology of robust fixed order H2 controller and onboard computer for Micro air Vehicles. The efficacy of the proposed method is demonstrated by designing a fixed order robust H2 stability augmentation system for lateral dynamics of a Micro air Vehicle, named Sarika-1. Strengthened Discrete Optimal Projection Equations, which approximate the first order necessary optimality condition, are used for the controller design. Effect of low frequency gust disturbance and high frequency sensor noise is alleviated through the output sensitivity and control sensitivity minimization. Digital Signal Processor (DSP) based onboard computer named Flight Instrumentation Controller (FIC) is designed to operate under automatic or manual mode. The controller is ported on to the flight computer, and subsequently, it is validated through the real-time hardware-in-loop-simulation. The responses obtained from the hardware-in-loop-simulation compares well with those obtained from the off-line simulation.