Even if I have an empty ~/.vimrc i.e. delete all the lines, the document displays like this. Only if I remove the file ~/.vimrc it resolves. I'm new to vim, pls help.

Edit: From the ArchWiki:

Commonly expected behavior such as syntax highlighting is enabled in defaults.vim, which is loaded when no ~/.vimrc is present. Add let skip_defaults_vim=1 to /etc/vimrc to disable loading of defaults.vim completely.

Means defaults.vim isn't loaded if ~/.vimrc is present. This is what causing the problem. There was this set display=truncate line in defaults.vim running what solve the issue. So I put that in my vimrc and it's solved.