India’s economic footprint, given its population, still remains small compared to the US, the European Union or China. It has much to learn from other economies, yet must implement solutions that fit its unique circumstances. India especially needs an effective long-term regulatory system based on collaboration rather than the current top-down approach. Regulations seek desirable outcomes yet are repeatedly used as political tools to push one agenda or another. Often, regulations fail to consider impacts on jobs and economic growth — or less restrictive alternatives. Regulations may be used to protect local markets at the expense of more widely shared prosperity in the future. Additionally, regulations inevitably result in numerous unintended consequences. In today’s hyper competitive global economy, regulations need to be viewed as “weapons” that seek cost-justified social and environmental benefits while improving the economic well-being of most citizens.

On the basis of the above passage, the following assumptions have been made:
In today’s global economy,
1. regulations are not effectively used to protect local markets.
2. social and environmental concerns are generally ignored by the governments across the world       while implementing the regulations.
Which of the above assumptions is/are valid?

The correct option is Neither 1 nor 2.

Let us analyze the validity of each assumption step-by-step based on the provided passage:

Analysis of Assumption 1: "regulations are not effectively used to protect local markets."
The passage states: "Regulations may be used to protect local markets at the expense of more widely shared prosperity in the future." This indicates that regulations are, in fact, used (or can be used) to protect local markets, even if it leads to negative long-term economic consequences. The passage does not claim that regulations are "not effectively used" for this purpose. Therefore, Assumption 1 is not a valid assumption that can be drawn from the passage.

Analysis of Assumption 2: "social and environmental concerns are generally ignored by the governments across the world while implementing the regulations."
The passage states: "In today’s hyper competitive global economy, regulations need to be viewed as “weapons” that seek cost-justified social and environmental benefits while improving the economic well-being of most citizens." This is a prescriptive statement about what regulations need to do, not a descriptive claim that governments worldwide are currently ignoring social and environmental concerns altogether. The passage does not provide evidence to assume that these concerns are generally ignored globally. Therefore, Assumption 2 is also invalid.

Since both Assumption 1 and Assumption 2 are invalid based on the text, the correct answer is Neither 1 nor 2.