NEW DELHI -- India will spend nearly $300 million in two years to expand water bodies like lakes and build drains in seven cities including Mumbai, Chennai and Bengaluru to mitigate floods and conserve water, a government official told Reuters on Wednesday.

Flooding, often fatal, is common in Indian cities every monsoon as rapid urbanisation devours city lakes and waste clogs drains. Such flooding has been preceded by severe water shortages in recent years, especially in Delhi and Bengaluru, where once-plenty water storage spaces have shrunk.

Ratings agency Moody's warned in June that India's growing water stress could affect its growth, which at a projected 7.2% this April-March fiscal year is the highest among major economies.

The federal government spending, the first flood control measure focused on water bodies, was approved recently and will also incorporate early-warning systems, said Krishna S. Vatsa, one of the three members of the National Disaster Management Authority.

"It could become one of the most significant approaches to flood mitigation in the cities," Vatsa said in an interview.

"While the importance of storm water drainage in reducing the runoff cannot be overlooked, they also need to be supplemented by some of the nature-based solutions such as increasing the capacity of rivers and lakes to carry rain water."

He said of the 25 billion rupees ($298 million), Mumbai, Chennai and Kolkata would each receive 5 billion rupees, while Ahmedabad, Hyderabad, Bengaluru and Pune will get 2.5 billion rupees each. No allotment was made for the capital Delhi, since the cities were chosen based on the frequency of floods and an assessment of resulting losses there, Vatsa said.

However, he warned that longer-term measures were also needed, especially since the country was witnessing huge volumes of rain in a short span of time.

More than 300 mm (11.8 inches) of rain lashed India's financial capital Mumbai in six hours early on July 8, authorities have said.

"Whenever a city receives 100 mm of rainfall, there is bound to be inundation," Vatsa said. "You need a certain level of investment continuously which is supported by a whole lot of governance measures so that the problem could be reduced."