What is the basis of Gandhi's critique of "Western Civilization" in his book Indian Home Rule, and how does he link this critique to an argument in favor of an Indian home rule?

According to Gandhi, Western civilization is a disease that should be resisted. He believes that this kind of civilization is mostly focused on improving bodily comfort, but it fails even in this aspect. For instance, it has resulted in improved housing structures for humans, improved clothing, and the development of advanced weapons and machines, such as ploughs, printing presses, and so on. However, in working to improve the lives of humans, Western civilization pushed people deeper into materialism and the pleasures money can buy. Gandhi observes that Western civilization “does not care about morality or religion." He then refers to Mahomed’s teachings and equates Western civilization to a “satanic civilization."
Gandhi also defines true civilization as “that mode of conduct which points out to man the path of duty." He posits that home rule should focus on the kind of civilization that does not glorify materialism and instead embraces morality and religion. He acknowledges retrogressive traditions within the true Indian civilization, such as child marriage and prostitution and explains that efforts could be made to eliminate these defects. He states that the general goal of the Indian civilization is to “elevate the moral being,” while the goal of Western civilization is to encourage immorality.

In his introduction to the book, Gandhi says directly that it is a "severe condemnation of modern civilization" and that if India would "discard modern civilization, she can only gain by doing so." The main thrust of his critique of modern (Western) civilization is directed at the greed and exploitation of modern industrial capitalism. This really is his basis for the entire book and is articulated in various ways throughout. As he says near the end of the book, "machinery is the chief symbol of Western civilization." Gandhi sees all of Western civilization as infected with the same greed that drives the English to exploit the Indian people. He criticizes every aspect of Western civilization—even Western doctors—as corrupted by greed. Western civilization is characterized as godless and opposed to Indian civilization, which required none of the "contributions" that the relationship with England has brought. Gandhi expressed his own desire to rid India of machinery (though he acknowledged the difficulty of this). He thought it was essential to gaining political and, more importantly, spiritual independence. Opposition to industrial capitalism was the basis of Gandhi's critique of Western civilization.

Gandhi's critique of the British is grounded in opposition to many aspects of British life, government, and rule over India.
First, Gandhi is strongly opposed to modernity and many aspects of modern industrial production. He sees modernity of the sort associated with Europe and the West as crudely materialist and harmful to the dignity of labor in the way it exploits workers. He advocates an austere spiritual tradition which renounces wealth and accumulation of material goods. He sees that Home Rule would enable India to forge its own path in thinking about modernity rather than having a western model imposed upon it and being subject to economic exploitation by the British. He argues that many of the modern "improvements" to India have resulted in poverty and erosion of community rather than the wealth Britain claimed they would bring.
Although Gandhi saw Jesus Christ as an admirable figure, he thought that Christianity as a religion supported such horrors as apartheid. He sees British rule as imposing Christianity on India and argues that India is by nature Hindu and that Home Rule would lead to a resurgence of Hindu spirituality in daily life and as an informing ethical principle for government. 
Finally, Gandhi argues that Parliamentary democracy is ineffective and that Indian Home Rule should not be a shadow of a bad British system but rather the creation of a superior form of government which would be self-regulating and based on enlightened self-rule, in which people's own spiritual progress would do away with the need for a large government. He saw the British ideological traditions as an obstacle to this.