According to the rating agency, with the pandemic's peak not yet in sight and the government not providing adequate direct fiscal support, the downside risks to its earlier forecast have materialised.
"If the pandemic were to peak out in September-October, GDP growth could move into mildly positive territory towards the end of this fiscal," the agency said in a report.
"Even in that event, manufacturing is expected to revive faster compared with services. But the risks to our outlook remain tilted to the downside till such time a vaccine is found and mass-produced."
As per the report, Crisil expects a permanent loss of 13 percent of real GDP over the medium term.
ALSO READ | 'Running Delhi Metro At Low Capacity Not Financially Viable:' DMRC Expresses Concern Over Loan Repayment
"In nominal terms, this amounts to Rs 30 lakh crore. This is much higher than a 3 percent permanent hit to GDP in Asia-Pacific economies (ex-China and India) over the medium run estimated by S&P Global on June 1," the report said.
"Catch-up with the pre-pandemic trend value of real GDP would require average real GDP growth to surge to 13 percent annually for the next three fiscals - a feat never before accomplished by India."
Besides, the report said that high-frequency indicators, both conventional and unconventional, correlate reasonably well with GDP estimates.
"In the April-June quarter, GDP contracted 23.9 percent, but that did not come as a surprise as these indicators were indicating a deep hit. But thereafter, till August end, they showed recovery from April levels, yet remained below pre-pandemic levels, implying the economic contraction continued, albeit less severely than in the first quarter," the report said.
"Hence, we expect GDP to contract 12 percent on-year in the second quarter of fiscal 2021."