City Councilman Marion Barry, his speech punctuated by the sound of splintering wood and falling chunks of old plaster, took his mayoral campaign to the streets yesterday where he outlined a program that he said would expand job opportunities and spur economic development in the city.

Barry, who chose to make his street-side statement in front of a boarded-up store in which two men were busily tearing out old walls on the second floor, accused his chief rivals, Mayor Walter E. Washington and City Council Chairman Sterling Tucker, of following "deliberate policies of gross neglect."

As he spoke, the two men gutting the store's interior leaned out of the second floor windows and found to their surprise that a press conference was under way beneath them. Abruptly the noise of the falling debris ceased.

Barry, for the benefit of the press and about 10 passersby who stopped to listen, continued to talk in front of the two-storey building at 5th and H Streets NE. But this time he was drowned out by a string of black smoke-spewing Metro buses and later by a noise blue dump truck.

Undaunted. Barry continued.

"I chose this location," said Barry, "from which to speak on these issues for several reasons."

He said the H Street commercial strip, which has a number of boarded-up stores, a supermarket and several small business shops, reflected the "gross neglect" of the mayor and Tucker. Barry has tried increasingly during the past three months to tie Washington and Tucker together, often referring to them as the Washington Tucker administration.

Barry said he had also chosen H Street to announce his program because small merchants along the strip have exhibited an "enormous spirit" to survive and he and his wife, Effi, live nearby in the 1200 block of E Street NE. "It is my own neighborhood," he said.

Barry said his program would include: implementation of a 1979 summer employment program that would put 30,000 youths to work; requiring all public construction projects to employ only District of Columbia residents; strong enforcement of laws requiring minority participation in business; establishment of a bonding program for minority contractors; the aggressive expansion of efforts to lure tourists and a proposal to create a school of business and commerce.

"This statement today represents only a broad overview of the very specific and well-formulated policies and programs that, as mayor, I will put into effect," Barry said.

In a Washington Post poll conducted earlier this month among 1,020 Democrats, Barry was viewed as being more effective at finding jobs for young people - a major problem in Washington - than the mayor or Tucker. Last year, unemployment among minority city youths reached an official level of 48.5 percent; some sources say that the jobless rate for Washington's youths was actually closer to 70 percent.

If elected, Barry said, he will use "vast amount of unused economic potential" in the city's budget, community or organizations, local businesses and the "have-nots - blacks, Hispanics, women and youths - to rebuild the develop areas like H Street."

Barry said he would also require that all persons employed on the city's public works projects be District of Columbia residents instead of the present practise of hiring "more than 50 percent" of the workers from suburban areas.

On Wednesday. Mayor Washington sent to the City Council a bill that would give a $600 tax credit to a business for every hard-core unemployed person hired.

The other announced candidates in the Sept. 12 Democratic primary are John L. Ray, Dorothy Maultsby, Charles S. (Trummie) Cain, Richard Jackson and James Clark.