I believe that this should be a solution:

1. make a shortcut of gs exe file
go to C:\gs\gs7.04\bin and right-click on gswin32.exe and then
on send-to->desktop as shortcut

2. go to desktop and right-click on this new shortcut,
there you will see two important text fields: target and start-in

example: if your gswin32.exe file is in folder like this C:\gs\gs7.04\bin then
in the shortcut target field you must have this:
C:\gs\gs7.04\bin\gswin32.exe "-IC:\gs\gs7.04\lib;C:\gs\fonts"

this sets shortcut to desired file, and tells gs interpreter where are the
libraries and fonts

Now, what we really want is to make gswin32.exe to see the directory
where we are working, so we can execute any of gs commands right from
that directory, like command "run"

As mentioned earlier, text field of shortcut properties "Start-in" tells shortcut
where to start exe, so for example if we decide to do HW5 in let's say this directory
C:\math308\HW5
then we put exactly this path in "start-in" text field

Now gswin32.exe starts in this directory and its environment includes all the files
of that directory including our *.inc files

Note: if you want to change your working directory, you must change the start-in
field of the gs shortcut, if you want the same functionality for a new directory!

I hope this will help!

(from Ljubomir Puhalovic)