Create multiple/single csv file for each sql records

[buran]

I

I want to avoid fetch all , as office SQL Data is big 60gb . memory issue might come.

There is no need to do cursor.fetchall(). You can iterate over cursor directly.
There is even an example in the docs

# standard
cursor.execute("select a from tbl where b=? and c=?", (x, y))

# pyodbc extension
cursor.execute("select a from tbl where b=? and c=?", x, y)

The return value is always the cursor itself:

for row in cursor.execute("select user_id, user_name from users"):
    print(row.user_id, row.user_name)

Then (not tested code):

import pyodbc
import csv
import os
 
connection = pyodbc.connect('DRIVER={ODBC Driver 17 for SQL Server};SERVER=DESKTOP-GQK64O6;DATABASE=Customer;Trusted_Connection=yes;')
with connection.cursor() as crsr:
 
    qry = "Select * from employee"
    crsr.execute(qry)
    
    folderPath = "C:\\Users\\xyz\\OneDrive\\Desktop\\C\\test_data\\output"
    header = next(zip(*crsr.description))

    for idx, row in enumerate(crsr, start=1):
        fname = f"Row{idx}.csv"
        fullpath = os.path.join(folderPath,fname)
        print(fullpath)
        with open(fullpath, "w", newline="") as outfile:
            writer = csv.writer(outfile, delimiter="|", quoting=csv.QUOTE_NONNUMERIC)
            writer.writerows([header, row])
            print(f"I am row {idx} --> {row}")