[4] Born to a Hindu Brahmin family which traces its roots to Raja Krishnaji Pant, Bhalerao studied under the patronage of Nizam.

Some years later, Nizam appointed him dewan (prime minister) of the state during the absence of Arastu Jah to Poona.

Bhalerao was a direct descendant of Krishnaji Pant, a Vatandar of Devagiri and a close aide of Mughal emperor Shah Jahan.

[8][9] His family is the founder of the Dafter-e-Diwani (Department of Finance) in Hyderabad Deccan during Nizam ul Mulk Asif Jah I.

After the death of Raja Dhondoji Pant in February 1783, his defterdarship of four hereditary western Subhas such the Carnatic, Bidar, Aurangabad and Khandesh were transferred to his elder son, Rai Omakant Rao.

[14] After the victory over the Tipu Sultan in 1792, Bhalerao was given the title "Raja Sham Raj" and many additional honors for his contribution in the war.

Author K. K. Mudiraj says, "Raja Sham Raj was of a religious turn of mind and setting aside his honours proceeded to Rameshwaram where he stayed for no less than six years.".