A pending job is scheduled to enable the balances for this dimension set. at the form. There are some records created in GeneralLedgerBalanceWork table but that's all. Am i missing something for this feature? Is there any issue with the Local VM?

Hi,
the balance update runs through the background Process automation framework.
The key batch job that drives it is “Process automation polling system job.”
Once the feature is enabled, you should see “General ledger balance process” listed among the background processes under System administration > Setup > Process automations.
There’s also a very clear and helpful article by Hylke Britstra that explains in detail: (19) The feature 'Performance enhancement for general ledger dimension set balance calculation' in D365FO | LinkedIn.