Preheat oven to 350 degrees F. Shake chicken in bag containing 1/2 cup flour, 2 tsp. salt & 1/2 tsp pepper. Brown chicken in hot shortening, then transfer to 9 x 13-inch baking pan.
In small saucepan, melt butter and add 2 Tbsp. flour; gradually stir in milk to make a medium white sauce. Cook until bubbly; add basil and salt. Spoon over chicken in baking pan; cover tightly with foil.
Bake for 35-40 minutes or until chicken test tender with fork and is no longer pink near bone. Sprinkle with paprika and serve over hot rice.