Drush is not able to bootstrap
The output of drush sql-connect is  mysql --user=root --password= --database=d8_test --host=127.0.0.1 --port=3306. Now, when I directly execute this command, it didn't work because mysql.exe was not there in the system PATH. So I added H:\xampp\mysql\bin to PATH (environment variable in Windows) and then it worked!