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Use -e with the echo in the above code as in echo -e "$output"

Or another approach

#!/bin/bash

read -p "Please enter a name : " name
awk -F":" '
BEGIN{ fmt="%20s%20s\n" }
function...

The single line output is because of field splitting (there are no double quotes around the backquotes)..
@OP: try using Ahamed's suggestion like this:
output=$(grep -w "$input" list.txt | awk '
...

This is not right. Did you try the code which I gave to see if it works for you without integrating it to your script?
I think what you are trying to do here is, get a input and display the details...