Outputstream is an abstract class so we cannot instantiate it.Why then a default constructor is provided for Outputstream class?

The class has to have at least one constructor, because all Java classes have constructors. Additionally, subclasses will have to chain to it - so it's got to be at least protected accessibility. The constructor doesn't need to do anything, so the authors decided not to provide an explicit one. Now, from JLS 8.8.9:

The default constructor has the same accessibility as the class

That's why it's public. It could have been explicitly provided as:

protected OutputStream() {
}

... or better yet, the JLS could have made it so that public abstract class default constructors were implicitly protected. However, it does no harm for it to be public.