I created a page in notepad and selected UTF-8 as the encoding while saving. Jekyll does not parse this page. It renders the liquid extensions in the page as they are.
Now I saved the same page using ANSI encoding. Jekyll parses that easily and my site is up and running. But it is limited only to ANSI and some characters appear as a question mark due to wrong encoding. I do not want to use ANSI instead of UTF-8 when the web fully supports it.