The article has a good list of Rails gems for development. Here are the ones I use:

awesome_print – very readable data printout on console.

better_errors – replaces standard rails error page with a much nicer designed one.

binding_of_caller – to enable REPL and variable inspection to better_errors

letter_opener – opens emails sent in the browser instead of actually sending them.

lol_dba – scans models to find DB columns that should be indexed

Link: Must have gems for development machine in ruby on rails – CodeBeerStartups via www.codebeerstartups.com