Step 1: Understand the question.
An Ombudsman-type institution in India means the Lokpal at the centre and the Lokayukta in the states. We must find who first recommended setting it up.
Step 2: Recall the reform history.
In the mid-1960s there was a strong push to fight corruption and improve administration, and several committees were formed.
Step 3: Find the first recommendation.
The First Administrative Reforms Commission, set up in 1966 under Morarji Desai, was the first official body to recommend an Ombudsman-type institution. It suggested two authorities: the Lokpal at the national level and the Lokayukta at the state level.
Step 4: Separate from other bodies.
The Santhanam Committee (1964) worked on corruption generally, but it did not design the Ombudsman institution. The 2005 ARC came much later. The India Against Corruption movement of 2011 was a public campaign, not the first recommending body.
Step 5: Pick the right option.
The first formal recommendation came from the Administrative Reforms Commission, 1966.
Step 6: State the answer.
The correct body is the Administrative Reforms Commission, 1966.
\[ \boxed{\text{Administrative Reforms Commission, 1966}} \]