supply voltage for device getting ICP didn't improve it is still 0.7V lesser

Get the thing in whack so all voltages are correct. Use a LDO as/after the voltage switch, that way you can get the exact required voltage.

Asking "why does it not work when the voltages are wrong" is futile. While shortcuts such as diode drop as a "regulator" may work in some cases, for programming all must be "perfect" since even small deviations can have dramatic effects. The chips are specified "leniently" for general use, but NOT for programming.

It is the same phenomena we see in all the kitchen table programmer threads: why does it not work when I do not adhere to the specs. Of course it does not.

Erik