a) We are using Oracle 8i DB.
> The query (or the DBMS) takes only 6 seconds
to return data to Perl.

How did you determine this? I think you're just assuming that.

c) So we conclude that it is mainly an issue with fetchrow especially when
the number of records are high. We tried other possible options like

As other have said compare the CLI version of the query to the perl version:

(Not an oracle person so if it looks like MySQL well, you'll live, its just an example to illustrate what to do)

oracle> SELECT TIME(); # your DB's equivalent obviously
oracle> YOUR QUERY;
oracle> SELECT TIME();

vs.

perl -mstrict -MDBI -we 'my $dbh = DBI->connect("YOURDSNHERE") or die DBI->errstr; print time(),"\n";$dbh->selectall_arrayref("YOUR QUERY");print time(),"\n";'

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