• The Indian social system was castes/class ridden with some communities regarded as superior to others. The caste system, although free from untouchability now, is still an important cultural identifier.
• India also has a large number of languages which act as barriers to intermixing of people. Due to ignorance, people have developed fear and prejudice to communities that speak different languages than one's own.

For example, my own name Vikas Kamat, indicates (just by name!) the following: - Origin (approximate origin in India),  Caste,  Language spoken at home,  Food habits (especially whether or not I like seafood) etc.,

This is a real problem in India. When someone asks you for a full name, you can be sure that he/she is trying to judge you by trying to fit you in the stereotype. In the earlier part of the 20th century, some leaders felt that this prejudice can be eliminated by not disclosing the other names. Both upper and lower strata of the society participated in its implementation. Many others, however, were proud of their heritage and continue to use all their names. 

This is the primary reason why some Indians just use initials whereas some use the complete name. 

Of course, there are some people have simplified longer names by use of just the initials. It is a lot easier to say or write P.T. Usha than the full name Pilavullakandi Thekkeparambil Usha.