At the onset of World War II in 1939, the bureau was proposed to be abolished. Arguably, Arcot Ramaswamy Mudaliar became the most instrumental in the creation of CSIR in India. As a member of Viceroy's executive council, and also of Commerce, he recommended that the Bureau should be terminated, not as a measure of economy, but to make room for a Board of Scientific and Industrial Research, which should be endowed with greater resources and wider objectives. It was by this persistence that the Board of Scientific and Industrial Research (BSIR) was created on 1 April 1940 for a period of two years. Mudaliar became the chair of the board. It was at this point that Bhatnagar was appointed to pilot the board, as the Director. The BSIR was allocated an annual budget of ₹5,00,000 under the Department of Commerce. By the end of 1940, about 80 researchers were engaged, of whom one-quarter was directly employed. Major achievements of BSIR included development of the techniques for the purification of Baluchistan sulphur anti-gas cloth manufacture, vegetable oil blends as fuel and lubricants, plastic packing cases for army boots and ammunition, dyes for uniforms and the preparation of vitamins, and the invention of a pyrethrum emulsifier and cream. In early 1941 Bhatnagar persuaded the government to set up an Industrial Research Utilisation Committee (IRUC) for translating results into application. The government then agreed to make a separate fund out of the royalties received from industry for further investment into industrial research. Mudaliar recommended that an Industrial Research Fund should be constituted, which would have an annual grant of ₹10,00,000 for a period of five years. This was accepted by the Central Assembly in Delhi at its session on 14 November 1941.