Mahatma Gandhi is an almost universally praised and beloved man who helped return India from independence from Great Britain. Since he achieved this through his promotion of non-violence and acts of civil disobedience and protest, many people believe he was a wonderful leader and peace keeper. I believe that he has earned his place on currency.
Yes, Mahatma Gandhi's photo should be on Indian currency, because he is so famous. He is known around the world and is well-respected. He is a national and international figure for the people of India, so it is appropriate to acknowledge him on money. Because he is so prominent, the country appropriately chooses to pay him respects by putting him on currency.