The brightly colored map in Mayor James D. Griffin's office here provides a marked contrast to the bleak picture of idled plants, empty stores and torn-up streets outside his City Hall window.

The map traces the route of a 14-station, $500 million light rail line, whose construction is leaving a trail of debris along downtown Main Street. The map shows the subway passing the new pedestrian mall, the two new bank headquarters, the new Hilton Hotel, the new Hyatt Regency and the new convention center--all in various stages of completion.

Griffin is confident that these projects, most of them financed by the panoply of federal urban aid programs, will help revitalize this aging, blue-collar town. But others, including many laid-off factory workers here, have their doubts.

Buffalo is in the midst of a long and painful transition from a near-total reliance on steel plants, auto assembly lines and grain mills to an emerging service, retail and tourism center. It is an increasingly familiar struggle for many older, northern cities that gradually are losing their industrial base.

"I'm not going to push the panic button," Griffin said. "We've got one of the biggest banking communities in the Northeast, one of the best hospital networks in the country. We've got new town houses and development all along our waterfront."

Despite all the development, Buffalo's population is shrinking, and at a faster rate than any other city in the nation except Cleveland or St. Louis, according to the 1980 census. More than one out of five people left town over the last decade as the population dropped from 462,000 to 357,000. Despite the exodus of many young workers, moreover, the jobless rate has hovered stubbornly above 15 percent.

The mayor acknowledged that none of the city's renewal projects would be possible without transit subsidies, urban development action grants, community development funds and other forms of federal aid.

"We've gotten as many grants as any city our size," Griffin boasted. "Older cities should be getting this federal aid. It's not a handout, it's money we send down to Washington. We helped the Sun Belt build the TVA, the Boulder Dam. Now we're saying, how about helping us back."

But some experts say that while federal grants can ease the pain of urban decline, they cannot reverse it.

"I don't think Buffalo can swim against the tide," said Anthony Downs, a senior fellow at the Brookings Institution in Washington. "A city can make progress and boost the morale of its people, but you can't completely overcome the disadvantages of this traumatic, long-range change."

Downs said it makes little sense to rely on mass transit and downtown shopping as a redevelopment tool. "The main advantage of a subway is that it's a gigantic public works project," he said. "But once it's built, it doesn't pay for itself. To think you're going to rebuild downtown Buffalo on the basis of retailing is ridiculous. It'll never happen."

If Buffalo continues to lose 22 percent of its residents every decade, Downs said, "it would no longer be there in 40 years."

The greater likelihood, he said, is that such cities will be left with a poorer and more dependent population that, like subway systems, will have to be subsidized by federal and state governments.

Most of the recent signs here have been negative. The area still has not recovered from Bethlehem Steel's announcement that it will close its sprawling Lackawanna complex later this year, wiping out 7,300 jobs. Just last week, 3,000 people, some waiting overnight in 32-degree weather, lined up to apply for 200 federally funded jobs.

Erie County welfare official Laurice Cushion said the relief rolls are jammed with record numbers of young people who have never held a job. "We are creating a population that's not used to working," she said. "The longer they stay on the rolls , the less chance of their finding work."

"Obviously, we haven't put a dent in the unemployment trend yet," said Jim Militello, Buffalo's commissioner of community development. "No way does this compare to 7,000 jobs at Bethlehem Steel disappearing. Some of the workers you can retrain, others you can't. I don't know what's going to happen to those people."

Some of Griffin's critics, particularly in the black community, say his focus on downtown development has excluded many poorer residential neighborhoods. City councilman George Arthur said that Griffin has ignored the need for low-income housing while pouring money into downtown hotels and luxury town houses along the Lake Erie waterfront.

"The mayor is practicing benign neglect," Arthur said. "Very few blacks have been employed at these hotels . . . .

"The mayor is trying to pacify us by putting 100 new houses on the lower west side. It's tokenism. What we're getting is peanuts compared to the waterfront development."

Despite the criticism, Griffin is betting the city's future on next year's subway opening. Every three minutes, the planners say, trains will run underground from the State University of Buffalo in the city's northwest corner, then rise above ground as an overhead trolley for the six downtown stations. Rides within the downtown zone will be free.

The mayor said he hopes the downtown district, which now includes several theaters and a 500-seat jazz club, will become the regional attraction that it was in the 1940s. He also said he hopes to lure corporate executives by touting the advantages of a town where submarine sandwiches sell for $2.25 and a nice house can be bought for $40,000.

But the showcase of Buffalo's redevelopment plan, a $22 million convention center, has been something of an embarrassment. Built four years ago amid predictions of great success, the center was host to only four major events last year, attracted fewer than 5,000 visitors and lost $400,000.

Bill Hanbury, who promotes the center for the Chamber of Commerce, said that most travelers have come to think of Buffalo as a way station on the road to Niagara Falls and Toronto. The chamber has countered with a "Talking Proud" campaign, trying to ease Buffalo's reputation as a cultural wasteland by playing up local attractions, from ski resorts to art museums.

"You cannot deny that we have an image problem," said Hanbury, who blames it on the long winters in western New York. "But we're working on 1985 and '86 and '87 and things look great. Without a doubt, conventions and tourism are the most encouraging light on the horizon for this community."

Downs of the Brookings Institution is more skeptical. "Buffalo has one outstanding negative--the climate is terrible," he said. "You have to build on the strength you have, expand industry you already have. You can't invent something you don't have."

Even Hanbury concedes that most of the tourism jobs would be "as a chef or a maitre d' or a cashier" and may hold little appeal for laid-off steelworkers. And therein lies the basic gap that no amount of local boosterism has been able to bridge.

"In a way, Buffalo has been the fall guy," Hanbury said. "For years, the federal government told us, produce, produce. We cranked it up and pumped it out. Now they say sorry, we don't need your plants any more."