diff --git a/gauge-ruby.go b/gauge-ruby.go
index ee9c5f1..d6a006a 100644
--- a/gauge-ruby.go
+++ b/gauge-ruby.go
@@ -20,10 +20,11 @@ package main
 import (
 	"flag"
 	"fmt"
-	"github.com/getgauge/common"
 	"os"
 	"os/exec"
 	"path"
+
+	"github.com/getgauge/common"
 )
 
 const (
@@ -50,6 +51,10 @@ func createStepImplementationsDirectory() {
 	createDirectory(path.Join(projectRoot, "step_implementations"))
 }
 
+func createEnvDir() {
+	createDirectory(path.Join(projectRoot, "env", "default"))
+}
+
 func createDirectory(filePath string) {
 	showMessage("create", filePath)
 	if !common.DirExists(filePath) {
@@ -154,7 +159,7 @@ func main() {
 		os.Chdir(projectRoot)
 		runCommand("ruby", "-e", "require 'gauge_runtime'")
 	} else if *initialize {
-		funcs := []initializerFunc{createStepImplementationsDirectory, createStepImplementationFile, createRubyPropertiesFile, createOrAppendToGemFile}
+		funcs := []initializerFunc{createStepImplementationsDirectory, createStepImplementationFile, createEnvDir, createRubyPropertiesFile, createOrAppendToGemFile}
 		for _, f := range funcs {
 			f()
 		}
diff --git a/ruby.json b/ruby.json
index 7c9c521..3b295c3 100644
--- a/ruby.json
+++ b/ruby.json
@@ -1,6 +1,6 @@
 {
     "id" : "ruby",
-    "version" : "0.2.0",
+    "version" : "0.2.1",
 	"description": "ruby support for gauge",
     "install": {
         "windows": [],