Why pendrive actually shows lesser space capacity than actually prescribed?

This is because the definition of kilobyte, megabyte and gigabyte have changed over the years. They used to be 1024 bytes, 1,048,576 bytes and 1,073,741,824 respectively. These values are now known as the kibibyte, the mebibyte and the gibibyte (the "bi" implying binary as opposed to the SI systems). Now the SI systems have been adopted, the values of kilobyte, megabyte and gigabyte are now 1,000 bytes, 1,000,000 bytes, and 1,000,000,000 bytes.

Hard drive and pen drive manufacturers adopted these standards quickly because it made their devices look bigger (a 16Gb device only has to be 16,000,000,000 bytes now and not 17,179,869,184 under the old measurement). However, operating systems don't always report according to the SI units (in some versions of Windows, both measurements were used in different places). Using the old standard for a gigabyte, 16,000,000,000 bytes equals 14.9Gb so it's clear the manufacturer has at least given more than 16 billion bytes and that some of the space is reserved. Different parts of different operating systems display drive sizes differently depending on whether it's looking at the physical drive properties (which include everything, including FAT tables and MBR) or the logical drive properties which gives the potential free space on a partition and doesn't include reserved space, just free space).

If you're formatting the drive you'll probably get the full size. If you're checking the free space on it, you'll just get the free space you can use (i.e. not that used by FAT and MBR).