Adding this for people with the same issue. OP was able to find the answer here (his answer on another forum):
https://python-forum.io/Thread-Fatal-Python-error-init-sys-streams-can-t-initialize-sys-standard-streams-Attribute?page=3
Just in case if someone again faces this exact same issue I would clarify what was the problem and how it was solved.
Initially it seemed like known python bug which happens when a file is named io.py which causes conflict with standard module io, this was clearly not case here.
Member @Gribouillis here pointed out to try executing python -E and it worked. Afterwards @metulburr again pointed out this behavior is not normal for fresh python installations. This clearly meant something was wrong with PYTHONPATH in environment variables.
What I did next was to remove all python paths from paths in environment variables(check @snippsat's screenshot for reference). Then uninstalled current python version. It is important to get rid of all paths to python installation before reinstalling because error occurred due to a invalid (likely due to change in installation directory) python path in paths. This completely solved the problem.
Also to reiterate what @gribouillis said it was probably bad idea to add PYTHONPATH to system in first place.