No approach is "correct." It is not true that totally tiled areas are superior to partially tiled areas. Ideally, under Indian conditions you should tile your bathroom walls up to 7 feet. But a fully tiled bathroom wall is even more effective against water splashing. The fact that material costs will be lower as compared to having fully tiled walls is one of the main advantages of part-tiling bathrooms. When you tile only half the walls in a bathroom you risk moisture and water absorption on them which can leave them stained, or worse, lead to precipitation behind the tiles.