Power up the microcontroller with XTR117

Yes, this is exactly what the VREG output is meant for.  I strongly suggest you take  a look at the following blogs which describe how to avoid many common pitfalls when designing 2-wire 4-20mA transmitters:

2-Wire 4-20mA Sensor Transmitters: Background + Compliance Voltage
https://e2e.ti.com/blogs_/b/precisionhub/archive/2014/11/04/two-wire-4-20-ma-transmitters-background-and-common-issues

 2-Wire 4-20mA – IRET Can’t connect to Vloop GND
https://e2e.ti.com/blogs_/b/precisionhub/archive/2014/12/09/part-2-two-wire-4-20-ma-transmitters-background-and-common-issues

2-Wire 4-20mA – IRET < 4mA
https://e2e.ti.com/blogs_/b/precisionhub/archive/2015/01/13/two-wire-4-20ma-transmitters-background-and-common-issues-part-3

2-Wire 4-20mA – Controlling 2-Wire Transmitters with Externally Powered Sources
https://e2e.ti.com/blogs_/b/precisionhub/archive/2015/02/24/two-wire-4-20ma-transmitters-background-and-common-issues-part-4

2-Wire 4-20mA – Input Isolated Sensor Transmitter

2-Wire 4-20mA – Increasing Sensor Power

https://e2e.ti.com/blogs_/b/precisionhub/archive/2015/04/14/2-wire-4-20ma-sensor-transmitters-background-and-common-issues-part-6

Hi Chirag,

The MPS430 devices are low power, but they are most +3.3V devices which means you would need a +5V to +3.3V LDO to power the MSP430.  This could be achieved with a simple device like the TL431, or an integrated LDO IC.

I suggest you post a question on the low-power DC/DC converters forum for assistance selecting a product for this application.