In which year did the Government of India formally propose the establishment…

The Central Provinces were formed in 1861, when the Government of India merged the Saugor and Nerbudda Territories with the Nagpur Province into a single province administered by a Chief Commissioner (with Nagpur as its capital). The Saugor-Nerbudda region had been taken from the Marathas after the Third Anglo-Maratha War (1818), and Nagpur had been annexed in 1853 under the Doctrine of Lapse after the death of the heirless Raghoji III; in 1861 these were combined. Hence the correct answer is 1861.