1. Place first 3 ingredients in a large saucepan. Gradually add 2 cups water and milk, stirring constantly with a whisk. Bring to a boil; reduce heat to medium, and cook 20 minutes, stirring frequently. Stir in 1/3 cup cheese.
2. Heat a nonstick skillet over medium-high heat; coat with cooking spray. Add beef; sauté 5 minutes. Stir to crumble. Remove beef; drain. Wipe pan; coat with cooking spray. Add onion, pepper, 1/8 teaspoon salt, and garlic; sauté for 4 minutes, stirring frequently. Add beef and sauce; simmer 8 minutes.
3. Divide polenta evenly among 4 shallow bowls. Top each serving with 1 cup beef mixture; sprinkle with 2 teaspoons cheese and 2 tablespoons basil.