Solution:
If you are using the programming IDEs like Eclipse, NetBeans, MyEclipse, etc. click on file->new->project and eclipse will ask you to enter the name of the package. It will create the project package containing various directories such as src, etc.
If you are using an editor like notepad for java programming, use the following steps to create the package.
The above command creates the package with the name package_name in the present working directory.