If single phase supply can not create rotating MMF, how does Induction motor generate torque?
It's a bit like being on a swing. Once you get it going you only need to "push it" at the right time each cycle to keep it swinging. 



The same goes for a single phase motor. Once the starter coil gets it going, the "pushes" from the AC power keep it circling in phase with the power supplied with a lag appropriate to the torque taken by the motor. 



Too much torque and it will cause the lag to reach a point where the push is at the wrong point in the cycle and will stall the motor if it does not include a restart mechanism.