In a bowl mix warm water, warm milk, dry yeast, sugar and oil. Let it rest for 5 to 8 minutes.

In a big bowl, add flour, corn flour, salt and baking powder. Mix it well and add yeast mixture to it and make a dough out of it. Knead the dough for 8 to 10 minutes so that the dough becomes smooth and elastic. Cover and rest it for 2 hours in a warm place.

After 2 hours the dough will be double in size. Take the dough out on a work top and with the help of some dry flour, roll it out in a big circle. Apply some oil on the rolled dough.

With the help of a glass or a cookie cutter, cut out circles from the rolled dough. Gather all the remaining dough and roll it, brush it with oil and again cut out circles from it. This will give you around 14 to 16 circles. Do not forget to brush it with oil so that after it is steamed, it can be opened to put the filling. Now put them individually on pieces of baking paper and fold them in half moon shape. Press them lightly with rolling pin or with hand. Cover and let it rest for 30 minutes.

Boil water in a steamer. Arrange prepared buns in the steamer and steam on medium heat for 8 to 10 minutes. After turning off the heat, leave it as it is for 3 to 4 minutes then only open the lid. Tie the lid with a cotton cloth so that the water droplets will not spoil the texture of the buns. few buns can be steamed at one time depending upon the size of the steamer. In the same manner finish making all the buns.

As soon as the buns come out of the steamer, remove the baking paper and leave the buns on a wire. Prepare all the buns in the same way.

To prepare mushroom filling, heat oil and butter in a pan and add chopped onion to it. Saute it for 2 minutes and add ginger, garlic, green chilli paste to it and cook it for 1 more minute. Now add chopped capsicum to it and cook for another minute. Now add mushrooms, salt, pepper, soya sauce and chilli sauce to it and mix everything well.

Cook it until all the liquid evaporates and everything is cooked well. Add coriander or spring onion and turn off the heat.

Take one bun, open it and fill with the prepared mushroom filling. Bao buns can be filled with any filling of your choice whether it is vegetarian or nonvegetarian. It can be even served plain with some butter.