Putin told a government meeting that a raise of 10 percent last September 1 for the military proved too small and ordered it doubled.
The military has avoided entering politics in post-Soviet Russia but analysts fear that discontent is sweeping through senior army ranks due to the benefit cuts, which had included a right to free travel on public transport.
Russia's government cut by two-thirds the 18 billion dollars (13.8 billion euros) in social benefits meted out annually to the country's underprivileged in a bid to cut what it identified as Soviet-era waste.
In some cases, the cuts were replaced with smaller monthly payouts, but pensioners and others argued that these payments were far too small and have been disrupting traffic across the vast country since January 10.
The discontent, the first of Putin's five years in office, have prompted speculation that Prime Minister Mikhail Fradkov's government may soon fall.
A public opinion poll published Friday said that Putin's own rating suffered a five percent fall over the previous month.