Dear Arunendra MB,
You will find many examples of users with over 100,000 items in their DSpace repository. We have ~95,000 and it's "fine".
As for specifics, our production server has 32GB of RAM, and we use DSpace 6 with Tomcat 7 and have a heap size of 8192M. I recommend stealing the JVM settings from the Solr 4.10.x init script, as DSpace is essentially a Solr frontend (and it runs Solr version 4.10.x currently). The 32GB of RAM is surely overkill, but above and beyond DSpace itself, we of course have PostgreSQL running and any other leftover memory is automatically used by the Linux kernel as a cache (for example for Solr index data).
We only do a full Discovery re-index once a month, or less, when we do some batch metadata cleanups. That takes about three hours and is an intensive process. Otherwise there is no need to do such expensive indexing.
Also, you should make sure you're running the latest PostgreSQL possible (PostgreSQL 10 with DSpace 6). On our web server we also aggressively limit non-human clients because they are a waste of resources and cause considerable load crawling useless and infinite combinations of /discovery and /browse subject results pages.
Regards,