Combine first 3 ingredients. Place flour in a shallow bowl or dish. Place breadcrumbs and 1/4 cup cheese in a second shallow bowl or dish. Combine 2 tablespoons water and egg in a third bowl; stir with a whisk.
Working with 1 cutlet at a time, dredge cutlets in flour; dip in egg mixture, and dredge in breadcrumb mixture.
Heat a large nonstick skillet over medium-high heat. Add 2 1/2 tablespoons oil to pan; swirl to coat. Cook half of cutlets 3 minutes on each side or until golden brown. Remove cutlets from pan; keep warm. Repeat procedure with remaining oil and cutlets.
Pour 2/3 cup pasta sauce mixture into bottom of a 3-quart casserole coated with cooking spray. Arrange chicken cutlets in a single layer over sauce mixture; cover with remaining sauce mixture. Top with mozzarella cheese and 1/4 cup Parmesan cheese.
Cover and bake at 375° for 20 minutes. Uncover and bake an additional 15 minutes or until cheese melts and top is brown and bubbly around edges. Sprinkle with basil.
MyRecipes is working with Let's Move!, the Partnership for a Healthier America, and USDA's MyPlate to give anyone looking for healthier options access to a trove of recipes that will help them create healthy, tasty plates. For more information about creating a healthy plate, visit www.choosemyplate.gov.